Abbey plc's executive chairman has not ruled out taking legal action against British bank Abbey National over the latter's decision to drop the word "National" from its name.

The high street bank recently began re-branding itself as "Abbey" in a move that reportedly infuriated the Dublin and London-listed Abbey plc, which has a house-building and plant hire business in the UK.

After the group's a.g.m. in Dublin yesterday, Abbey's executive chairman, Mr Charles Gallagher replied "not yet" when asked if it would take legal action against the bank.

"They had a rebranding last week and are styling themselves 'Abbey', and that represents an overlap with us in that we are Abbey," he said. "I had a brief conversation with Abbey National's chief executive [Mr Lugman Arnold], and he said he had taken a note of our concerns. And we are concerned because we think it could cause confusion."

Mr Gallagher told shareholders at the a.g.m. that business in the early months of this year had continued at healthy levels, with houses in England and Ireland selling well. The meeting approved a dividend for the year of 14.5 cent. The group had earnings per share in the year to April 30th last of 107.62 cent. It posted a pre-tax profit of €48.5 million on a turnover of €172 million.

Mr Gallagher told The Irish Times that, if this week's Central Bank warning on a house price collapse was correct, it would be "extremely bad" for the group. But he argued that the market would remain healthy if employment remained strong and inflation was kept under control.

He was also critical of the local authorities' proposed development contribution, which builders say could add up to €20,000 to the cost of a new house.

Mr Gallagher said it would amount to a tripling of levies and contributions paid by builders to local authorities and argued that increases on that level were not helpful. He added that he supported the Irish Home Builders' Association stance on the issue.

The group's annual report shows Mr Gallagher was paid a total of €677,000 in salary and other benefits in the year to April 30th, 2003. His salary and fees came to €602,000, while he received €75,000 in benefits in kind. The total package is a €40,000 boost on the previous year's.

Overall, the company's four executive directors were paid a total of €1.47 million in salary, fees and benefit in kind during the year.