NEW YORK (FORTUNE Magazine) - Charles Prince's legal training is coming in handy: The Citigroup CEO spent much of the past two years paying fines and negotiating settlements for Citi's role in financing Enron and other fraud-ridden outfits.

Now the CEO has to produce internal growth at a company that has long expanded through acquisition, with two handicaps: A lot of experienced managers have departed, and rising short-term interest rates are squeezing margins for all banks.

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Citi may be the biggest and most diversified financial services firm in the world, but it still has huge avenues for expansion, particularly overseas, where it has only a low-single-digit share in most markets.

Prince plans to open hundreds of new branches in foreign countries this year.

We chose Citi (Research) as one of the top picks for 2006 in our recent Investor's Guide. The stock is down since then, but we haven't changed our mind. The company is at the top of virtually all its businesses, ranging from credit cards to retail banking to brokerage services.

Moreover, it just hiked its dividend for the 21st consecutive year, bringing its yield to 4.3 percent, one of the highest in the industry.