Goldman Sachs, the sixth biggest bank in the US in terms of assets, is preparing to issue new shares worth $6 billion to shareholders to repay the $10 billion it was given by the US government as part of the Treasury's $700 billion bailout scheme.

Several small US banks have already repaid their loans. These include the Signature Bank of New York ($120 million), Old National Bancorp of Indiana ($100 million), Iberiabank of Louisiana ($90 million), and Bank of Marin Bancorp of Novato, California ($28 million).

All the banks paid 5 per cent interest on the money they had received.

The details of the cash call would most likely come after the banking group reveals its first quarter figures in New York tomorrow, which are expected to show a return to profitability following its first quarterly loss at the end of 2008.

A 47-per cent gain in the Goldman share price this year and a return to profitability in the first quarter might help the bank's chief executive officer Lloyd Blankfein raise new money, analysts said.

Also, Goldman is understood to be confident that it will pass the stress test and is therefore keen to get the $6 billion rights issue out of the way as quickly as possible.

However, Goldman's decision on whether to go ahead with the rights issue is likely to depend on market conditions.

Analysts believe that the bank has ample liquidity to pay back the Troubled Asset Relief Programme (TARP) loan without a share sale but would rather maintain its cash cushion at or near current levels of about $111 billion.

The TARP payments were made to improve confidence in the banking system in the wake of the collapse of Bear Sterns and Lehman Brothers.

The US Treasury forced the country's biggest banks to participate in its $700 billion TARP in October to calm fears about the industry's stability and to avoid singling out weaker banks, regardless of whether some banks actually needed extra cash.

Goldman insiders insist that the bank never wanted to accept the government's handout under the TARP but had no choice.

While Goldman is in possession of the government funds it must abide by strict regulations on executive pay and certain operations imposed by the US Treasury, the Federal Reserve and other regulators.

But the banks are ­forbidden from paying back the ­government until they have undergone a top secret "stress test" designed by the US Treasury.

The banks are also forbidden from ­talking about the test but it is expected to be completed by the end of this month or the first week of May. (See: Fed asks banks to keep mum on stress test results).

Elizabeth Warren, a Harvard Law professor charged with overseeing the TARP programme on behalf of the US Congress said in an interview with The Observer last week that she strongly believed the banking system would not recover fully until the management of all banks receiving help were replaced and shareholders were "wiped out".

Meanwhile, the first-quarter earnings reports by banking giants Goldman Sachs Group, J.P. Morgan Chase and Citigroup this week could show how certain corners of the financial system are recovering, while others are still struggling, analysts said.

Banking stocks have rallied nearly 30 per cent since early March.

Last week, Wells Fargo gave quarterly earnings guidance that blew the doors off Wall Street's forecasts.

JP Morgan, after Wells Fargo, stunned the market on Thursday by forecasting record quarterly profits of around $3 billion driven by strong results in its mortgage unit.

Citigroup, the third-largest US bank, has tumbled 55 per cent in New York Stock Exchange composite trading this year and is expected by analysts to report a sixth consecutive quarterly loss.

Bank of America, the largest US bank by assets, has dropped 32 per cent this year, but analysts estimate it will report a first-quarter profit.