Breakdown service AA is set to launch its first mortgage product next year after agreeing a ten-year partnership deal with Bank of Ireland.
The company currently offers savings accounts through a tie-up with Birmingham Midshires, a division of Bank of Scotland, as well as life insurance cover via Legal & General.
Its first product launch with Bank of Ireland, planned for this month, will be a credit card, with loans and savings accounts to follow. The partnership also expects to launch the first AA-branded mortgage in 2016.
AA executive chairman Bob Mackenzie said: “This long-term partnership forms a fundamental part of our growth strategy to transform the AA into a membership club serving a broader range of the UK motorists’ needs.
“This new venture builds on the AA’s brand strength and financial services expertise and lays the foundations for the AA to develop a long-term strategic financial services proposition.”
Bank of Ireland already has a financial services relationship with the Post Office, offering current accounts, mortgages and credit cards.
Des Crowley, chief executive of the lender’s UK arm, said: “This new partnership with the AA is an important development for Bank of Ireland, building on the highly valued long-term and successful financial services partnership which we have in the UK with the Post Office.
He added: “Our strategy is to selectively be the long-term partner of choice with certain select leading and trusted brands in the UK whose vision and customer ethos we understand and share as they seek to expand and develop their presence in financial services.”
Liberum analyst Joe Brent said the tie-up is expected to “revitalise” AA’s sales of financial products, which have become “increasingly unimportant” for the group, accounting for less than 1 per cent of overall sales.