Investors should be aggressive in buying U.S. banking stocks, as a recent upheaval in the industry has created "attractive entry points," Citigroup analysts said on Monday, while upgrading their rating on Citizens Financial Group's stock.

Commercial real estate (CRE)-related concerns highlighted by New York Community Bancorp and Japan's Aozora Bank last week do not shake the brokerage's confidence in the broader group of banking stocks, it said.

In CRE, the exposure to office loans has been the primary concern for investors, but such loans only make up for 1% to 4% of the total for banks under Citi's coverage, Citi said.

While profits have been hit in recent months as lenders build up capital buffers against potential loan losses tied to CRE, "the bulk of reserve build is behind," Citi said.

The banking industry was on shaky ground last week after NYCB, a major CRE lender in New York, reported a surprise quarterly loss and slashed its dividend.

The turmoil also raised questions about other lenders' exposure to CRE, in which borrowers have been under pressure because of elevated interest rates and high vacancies due to remote working.

"We have maintained the view that investors should be playing offense rather than defense in the current environment," Citi analysts wrote.

The brokerage upgraded Citizens Financial's stock to "buy" from "neutral." Citizens and M&T Bank were among the biggest underperformers in the KBW Bank Index since NYCB's earnings report.

"We view now as a good opportunity to step in for a stock that has a lot of embedded growth due to significantly under-earning on net interest income that will course correct over next couple of years," the brokerage said.

It also reiterated its "buy" rating for M&T Bank' stock, citing expectations that "positive commentary" from the bank's management team will restore market confidence in its credit exposures.

(Reporting by Niket Nishant in Bengaluru; Editing by Maju Samuel)