New yuan lending among commercial banks shrank last month compared with August while aggregate financing continued to rise, as local construction projects may have found different channels for financial support.

Banks extended 623.2 billion yuan ($99.5 billion) in new loans in September, slightly lower than average market expectations, according to data released on Friday by the People's Bank of China.

The figure fell from August's 703.9 billion yuan, a record high for the month as the government sought financial support for new rounds of investment projects intended to spur economic growth.

Aggregate financing, which measures funding sources including loans, bond and stock issues, reached 1.65 trillion yuan last month.

"The weaker-than-expected lending reflects the central bank's intention to stabilize the monthly lending pace among banks," said Zhong Zhengsheng, an analyst at Everbright Securities.

Increases in aggregate financing were mainly driven by a surge in bond issues and trust loans, as the monetary authorities intended to diversify the funding channels of the economy, he said.

In the third quarter, financing through bond issues increased by a monthly average of 245 billion yuan. Trust loans jumped by more than 300 billion yuan in the past two months, "which is probably related to local construction projects' financing demand", Zhong said.

New trust loans in September stood at more than 202 billion yuan, compared with 118 billion yuan in August, said the central bank.

Lu Zhengwei, chief economist at Industrial Bank, said that in the past 12 years, new loans extended in September were usually higher than those in August, adding that the end of the quarter often sees a surge in new lending.

"And the growth of trust loans is very noticeable as it proves local construction projects are seeking funds from some channels other than traditional bank loans, which may be very risky."

Analysts have questioned whether the investment plans to stimulate the economy would work if they fail to get sufficient financial backing, especially after banks lent just 540.1 billion yuan in July, the lowest level since October 2011.

Banks have become more prudent when extending loans as they are coming under pressure from deteriorating asset quality.

From July to September, special-mention loans and overdue loans - which are indicators of future non-performing loans - are set to increase, said a report from Bank of Communications Co Ltd.

Contact the writer at wangxiaotian@chinadaily.com.cn