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Barclays shares surge after bank says it will double dividend

  • Barclays posted a significant loss on its full-year 2017 profits, hit in part by the U.S. tax overhaul.
  • The U.K. bank's net loss was £1.92 billion ($2.67 billion), part of which was a one-off £901 million charge on U.S. deferred tax assets. The group's pre-tax profit, however, rose by 10 percent to £3.54 billion in 2017.
  • Numerous banks have seen one-off tax write-downs in the billions in their fourth quarter profits due to the Republican-led tax overhaul passed in December of last year.

Barclays shares surged 5 percent higher Thursday morning on positive pre-tax earnings news and the announcement that it would double its dividend for 2018.

The U.K. bank's pre-tax profit rose by 10 percent to £3.54 billion ($4.92 billion) in 2017, and customer deposits increased 2 percent to £193.4 billion. Barclays also announced a restoration of its dividend to 6.5 pence per share for 2018, more than double the last year's full-year dividend of 3 pence.

This was reflected in the price of Barclays' shares, which were trading as high as 5.2 percent against the previous day in morning deals.

While pre-tax profits surpassed the 2016 figure of £3.2 billion, they fell short of analysts' averaged expectations of £4.7 billion. However, this forecast was not updated to account for the tax write-down from the U.S., according to Reuters.

Full-year 2017 net profits took a hit in part from the U.S. tax overhaul and a weaker dollar.

Barclays' net loss was £1.92 billion, part of which was a one-off £901 million charge on U.S. deferred tax assets.

Numerous banks have seen tax write-downs in the billions in their fourth quarter results due to the Republican-led tax overhaul passed in December of last year, though the losses are expected to be one-offs.

The bank's sell-down of its Barclays Africa unit also dragged down its profit for the year. The sell-down of its shareholding in Barclays Africa, closure of its non-core unit, establishment of its Service Company and creation of its U.K. ring-fenced bank made 2017 "a year of considerable strategic progress for Barclays," CEO Jes Staley said in a press release.

"2018 will be the first year in five years that this bank begins with a clean operating model," Staley told CNBC shortly after the figures were announced. The bank has been struggling to shake off issues with its reputation after several years of scandal, the most recent of which centered on allegations of unlawful whistleblower mistreatment in early 2017.

Staley took charge of the bank in 2015 on a pledge to rebuild the bank's image, and is its fifth CEO in seven years.

"We still have some legacy issues ... But we are very comfortable with the position of the bank," he added.