UPDATE 1-China Sept new loans at 623.2 bln yuan miss forecast

* September new yuan loans total 623.2 billion yuan (f'cast650 billion yuan

* September total social financing totals 1.65 trillion yuan * September yuan bond issuance at 227.8 billion yuan

(Adds details, analyst quotes)

BEIJING, Oct 12 (Reuters) - Chinese banks made 623.2 billionyuan ($99.28 billion) of new local currency loans in September,data showed Friday, missing market expectations for 650 billionyuan and reinforcing calls for further policy easing to supportthe slowing economy.

The September new loan data, released by the People's Bankof China in a statement on its website () was downfrom 703.9 billion yuan in August.

"The fall in new lending shows the central bank might havetaken measures to control credit supply given thehigher-than-expected reading in August," said Shen Jianguang,Chief economist at Mizuho Securities in Hong Kong.

"Liquidity conditions are still tight in China and I thinkthe central bank should cut RRR as soon as possible."

The PBOC cut interest rates in June and July and has loweredrequired reserve ratios (RRR) three times since late 2011 tofree an estimated 1.2 trillion yuan ($190 billion) for lending.

But it has held off on more aggressive easing measures sincethen, despite further signs of cooling demand at home andabroad. Instead, it has opted to pump short-term cash into moneymarkets to ease credit strains, a move analysts say reflectsBeijing's concerns about renewed property and inflation risks.

Many analysts, however, still believe it could cut the RRRand even benchmark interest rates to support infrastructureinvestment and bolster economic growth.

The central bank said last month that it will "fine tune"policy to cushion the economy against global risks while closelywatching the possible impact from recent policy loosening in theUnited States and Europe.

Still, some analysts caution against reading too much intothe volatile loan data as the People's Bank of China has beenencouraging gradual changes in the country's financial systemsto wean firms off bank credit in favour of financing through thecapital markets.

"The new yuan loan data is slightly lower than marketexpectations, but we should also pay attention to the totalsocial financing aggregate, which is quite a strong figure andreflects the effect of policy loosening," said Sun Junwei, Chinaeconomist at HSBC in Beijing.

"We should notice that the proportion of bank lending in thetotal social financing pool has decreased over recent quartersand we should give more stress to other financing channels, suchas corporate bond issuance, when gauging the total liquidity inthe economy."

China's total social financing aggregate, a broad measure ofliquidity in the economy, stood at 1.65 trillion yuan inSeptember, up from 1.24 trillion yuan in August.

Of the total, companies raised a net 227.8 billion yuanthrough bond issuance in September, up 175.8 billion yuan fromthe same month last year, the central bank said.

For the first nine months of 2012, yuan loans accounted for57.3 percent of total social financing, down 0.6 pecentagepoints from the same period last year, it added.

($1 = 6.2770 Chinese yuan)

(Reporting by Beijing economics team; Editing by JacquelineWong and Nick Edwards)

((kevin.yao@thomsonreuters.com)(+8610 6627 1215)(ReutersMessaging: kevin.yao.thomsonreuters.com@reuters.net))