Bluestone returns to non-conforming niche

Bluestone is getting back into non-conforming lending five years after suspending new loans from its cornerstone product range.

Bluestone said yesterday that the Australian Finance Group would market the loans as its "launch partner."

Peter Wood, general manager of asset management for Bluestone, said the firm researched the market for more than a year to work out its options for resuming lending.

"We found some niche pockets that were not being fulfilled. The niche is the pure non-conforming or specialist market."

He said these included "those people who deal with major banks or other lenders... [who have] had credit issues in the past. There are products [there] that are very near prime. That market has been pretty aggressively pushed."

"The niche below that is where we see opportunities. The non-conforming market has certainly not gone away."

Bluestone's lending book peaked at A$5 billion during the credit boom and stood at around $3.5 billion when it stopped lending in 2008. It still has around $1 billion in loans under management.