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MARKET COMMENT
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Investors will focus on what was not said in today's trading statement from Lloyds TSB (LSE: LLOY). With earnings under pressure and the shares offering a historic dividend yield of 6.5%, the bank must be aware that the fate of the forthcoming payout is currently top of the private shareholder agenda. However, the update avoided any mention of the dividend -- a quite disgraceful and inexcusable omission. Lloyds TSB should take a leaf out of Abbey National's (LSE: ANL) book. Last week, noting the some 8% yield on its shares, Abbey stated: "Abbey National is aware of the interest of shareholders in its dividend policy...Although final guidance on this issue can only be prudently provided once the strategic and financial reviews are completed, the present dividend level is not expected to be sustained." But it's not as if Peter Ellwood, Lloyds TSB chief executive, isn't happy to give dividend indications to his City mates. In the usual 'nudge-nudge, wink-wink' fashion, Ellwood recently told a closed-door analyst briefing that the bank had "no plans" to cut its payout. Of course, such words carry no guarantee, but a formal dividend remark today would at least bring private shareholders into the picture. For what it's worth, those well-informed brokers currently expect Lloyds TSB to raise its full-year 2002 dividend by about 5%. With the share price falling 20.5p (3.8%) to 510p this morning, a 6.9% prospective yield is presently on the cards. So all of this leaves the ordinary Lloyds TSB investor in a bit of a quandary. Does the lack of dividend comment mean there's simply nothing to worry about? Or is Lloyds TSB, in that all too familiar stock market manner, just postponing the bad news to the last possible moment? Ellwood will break his silence on the dividend sooner or later. Most likely, shareholders should be prepared for short-term income disappointment. More: Lloyds TSB Discussion Board | Jimsusan Asks "Too Good To Be True?"