Chuck Prince, Citigroup (NYSE: C - News) chief executive, on Thursday appeared to adjust his previous focus on building long-term value by announcing that new investment spending next year would be cut by more than half to about $600m.

The move followed pressure from shareholders to rein back expenses. Mr Prince admitted the decision was partly a response to Citigroup's sagging share price.

John McDonald, an analyst at Bank of America Securities, said it represented an "unfortunate departure" from Mr Prince's previous "long term" focus.

But the shares rose 1.5 per cent to $53.11, the highest for six years.

Mr Prince said last summer that cutting investment spending would be "fundamentally the wrong thing to do at this time".

His comments followed a call by Prince Alwaleed bin Talal, who owns a 4.3 per cent stake in Citigroup, for "draconian" measures to curb cost growth. In October, Mr Prince talked about sustaining investment spending.

But on Thursday, Mr Prince told investors Citigroup had a "dynamic" approach to managing investment spending. "We dial it up and we dial it back a bit."

He said the decision to cut back next year partly reflected the expectation that credit costs would rise. Citigroup could also afford to cut back because acquisitions would help step up the growth rate, he said.

Some of Mr Prince's supporters have applauded his previous refusal to cut back on investment spending for short-term considerations, as critics say was common under his predecessor Sandy Weill.

John McDonald, analyst at Bank of America Securities, said the move was a "somewhat unfortunate departure from the 'long term' focus and strategic direction that has dominated Citi's dialogue over the past year, and may cost a little crediblity in terms of management's willingness to sacrifice short-term earnings for the long-term value of the franchise".