) -- There are high expectations for


(C) - Get Report

as it reports fourth-quarter earnings on Tuesday, with Wall Street focusing on whether the bank's growth plan can lead to a dividend boost or share buyback.

Citigroup CEO Vikram Pandit

Citigroup is expected to earn 50 cents a share, putting its 2011 EPS at $3.83, reflecting 9% earnings growth in 2011, according to expectations compiled by


. Nevertheless, revenue in the quarter is expected to grow just 1% to $18.5 billion, making an expected $79.7 billion overall 2011 revenue and 8% below last years' levels, according to


. The forecasts indicate that Citigroup will post its most profitable year since 2006.

Higher profit expectations and slowing revenue reflects Citigroup's multi-year strategy to trim risky loss-leading U.S. businesses in order to invest in higher margin emerging market businesses. The bulk of Citigroup's revenue still comes from developed markets, with a full 37% of sales coming from North America, as of the third quarter. In profitability, Citigroup has already crossed the Rubicon. Emerging markets accounted for 55% of the $12.4 billion in profit at core Citigroup, nine months into 2011. The percentage rises, when adding the banks loss-making CitiHoldings unit.

Look for that shift to continue in the fourth quarter, especially in Citigroup's increasingly profitable Consumer Banking unit, which drives roughly 50% of overall profits. Citigroup has earned 80% of $5.4 billion in overall Consumer Banking profit from emerging markets. Continued emerging market growth in fourth quarter earnings could bode well for 2012 earnings and dividend expectations.

Sandler O'Neill analyst Jeffrey Harte calls Citi his large-cap pick for 2012, highlighting non-European international growth, dividend prospects and smallish exposure to U.S. real estate as key drivers. "

We do not expect

Citigroup's current valuation discount to persist," writes Harte in a January note, citing non-U.S. diversification and share prices valued at just 60% of tangible book value as other signs of value. Harte gives a "Buy" rating and a price target of $55 to Citi shares.

Currently, 21 analysts polled by


give Citigroup an average price target of $42.37 a share. For more on Citigroup's shares, see

19 S&P 500 laggards that could be leaders in 2012


Richard Staite of Atlantic Equities rates Citigroup as "Overweight," with a price target of $52 a share, citing emerging market growth and high capital ratio's as outweighing one-off fourth quarter charges.

In December,


(C) - Get Report

announced an expensive plan to cut 4,500 jobs in coming quarters, or 1.5% of its workforce as part of an up-to-5% expense reduction plan. The plan will result in a $400 million charge to earnings. In addition, management told analysts to expect a $500 million loss from a reversal of accounting gains on the banks credit spreads, which added $1.9 billion to third quarter earnings.

Dividends aside, watch for a continued reduction in Citigroup's risk weighted assets and strengthing of its capital, especially as legacy U.S. based-mortgage liabilities cast a pall over the shares of Citi and its peers.

For more on the U.S. mortgage mess and New York Attorney General Eric Schneiderman see the

bank's biggest fear for 2012

. For other headwinds facing Citigroup and big banks, see more on a

massive looming credit card antitrust case


Citigroup's earnings mark the three year anniversary of a program called


to sell and run off $850 billion in "non-core" assets like foreign businesses and mortgage assets. With $538 billion in sales since the launch, CitiHoldings has been cut to just 15% of Citigroup's assets.

With the billions generated by selling assets ranging from brokerage operations, mortgage, student loan portfolio's and even a record label with rights to

The Beatles

, Citigroup has been able to rebuild its capital and invest in promising emerging market businesses.

Citigroup's also been able to cut its burdensome risk weighted assets to pre-crisis levels - a not so small feat that many European banks may envy. Via CitiHolding's, the bank has been able to build its Core Tier 1 capital to 11.7% as of the third quarter, up from 2010 levels and four times higher than 2008, when the bank took $45 billion in

Troubled Asset Relief Program


Among risk weighted assets, 22% reside in CitiHoldings, mostly in its Local Consumer Lending portfolio, concentrated in money losing legacy U.S. mortgage assets. In 2011, CitiHolding's has seen its Local Consumer Lending losses narrow 50% to $1.93 billion from levels near $4 billion, nine months into the year

With asset sales, restructuring charges and accounting gains part of fourth quarter earnings, scrutinize Citigroup's emerging markets growth, its Consumer Banking unit and CitiHolding's Local Consumer Lending losses for signs of whether the bank is prepared for a transformative 2012, which could result in the share gains and dividend increases that analysts expect.

KBW analysts project that


(JPM) - Get Report


M&T Bank

(MTB) - Get Report


Huntington Bancshares

(HBAN) - Get Report


Wells Fargo

(WFC) - Get Report


Fifth Third Bank


are all large-cap banks that will achieve higher than 3% dividend yields in 2012.

For more on bank dividends, see

5 banks ready to boost dividend buybacks in 2012


-- Written by Antoine Gara in New York