UPDATE 1-China April loans total 632 billion yuan-sources

BEIJING, May 7 - Chinese banks extended a total of 632 billion yuan ($92.7 billion) in new local-currency loans in April, according to banking sources.

Chinese state media earlier this week put the figure at around 600 billion yuan.

The sources declined to be named because the figures are not due to be released by the central bank until next week.

The total, if confirmed, would be well down from March's record high of 1.89 trillion yuan but would still be strong by historical standards.

New lending in April 2008 was 463.9 billion yuan.

Economists said slower loan growth was both expected and desirable after banks made a record 4.58 trillion yuan in new local-currency loans in the first quarter.

The sources said short-term bill discounting totalled 120 billion yuan in April, accounting for about 19 percent of all new loans in the month.

Bill financing took up about a third of new yuan lending in the first quarter, prompting critics to say the loans were being used for financial engineering and window-dressing of corporate balance sheets rather than for long-term investment.

The country's big four state lenders and smaller joint stock banks extended 390 billion yuan of April's new loans, the sources added.

For a preview of lending and money supply data due next week, double-click on [ID:nPEK272526] ($1=6.819 Yuan)