AA ditches Kiwi bank for Oz insurer

The AA already has a joint venture with Suncorp in the form of AA Insurance. Photo/Marcus Bailey.

The Automobile Association has entered into a third joint venture with Australian insurance giant Suncorp, ditching Heartland Bank in the process.

Called AA Finance, the new company will offer loans for cars, motorbikes and boats using the backing of Suncorp New Zealand.

The venture will see the AA sever its ties with Heartland which has previously provided financing to its members.

An AA spokeswoman said it had offered financing options for its 1.7 million members for 25 years with various partners but had decided to go with Suncorp because it wanted to extend its offering.

"We used to be with Heartland Bank but will phase out those arrangements."

The split has been amicable but a Heartland spokeswoman said it did not want to make any comment on it.

The impact to Heartland's bottom line is expected to be minimal. Heartland is due to report its half-year result Tuesday.

The AA already has joint ownership of general insurer AA Insurance and life insurer AA Life with Suncorp.

The spokeswoman said AA Finance was in the process of recruiting for a chief executive who will then look to set up his or her new team in an office in central Auckland.