Islami Bank Bangladesh, the country's largest private bank, saw its financial performance improve in the past one year, according to its Chairman Arastoo Khan.

For instance, IBBL's default loans at the end of 2017 stood at 3.56 percent, down from 3.74 percent a year earlier, he said at a press conference yesterday to disclose the bank's financial position.

In 2017, the bank's credit growth was 13.7 percent against the deposit growth of 10.7 percent. Its total deposits stood at Tk 75,130 crore.

Though the loan-deposit ratio went past the authorized limit of 90 percent set by the Bangladesh Bank in the middle of the last year to 90.2 percent, it has come down to 87.8 at the end of last year.

The bank made fresh lending of Tk 8,000 crore last year to take its total loan portfolio to Tk 70,000 crore.

Its income growth improved to 9.2 percent last year from 8.2 percent the previous year, he said.

Each share of IBBL lost Tk 0.5, or 1.43 percent, to close at Tk 34.50 yesterday.

Going forward, the bank will put in more effort to enhance its financial technology by expanding mobile banking and agent banking services, said Khan, who assumed his current position on January 5 last year after a major reshuffling.

The bank will also focus on the small- and medium-sized enterprises this year, shifting away from the corporate sector.

The veteran banker also touched upon the overall banking sector.

The interest rate on deposits are set to go up this year if the BB announces a contractionary monetary policy for the second half of the fiscal 2017-18 to guard against inflation risk.

"Bangladesh Bank will take measures in the new monetary policy to pull money into banks from the market."

The banking sector will face challenges in liquidity management due to the higher cost for deposits, he said.  The weighted average interest rate on deposits, which remained subdued in the last one year, took an upward turn in November due to rising demand from banks.

The interest rate on deposits increased slightly to 4.9 percent in November last year from 4.89 percent the previous month, according to data from the BB.

Private sector credit growth already crossed 19 percent in November, which is way past the target of 16.3 percent set for June this year by the BB.

Moreover, it is a common practice that expenditure remains high in the election year.

"As inflation management is the major task for central bank, it is bound to mop up money from the market though various tools." But the central bank will have to keep balance between inflation and liquidity flow in the upcoming monetary policy, he added.

Abdul Matin, chairman of the executive committee of IBBL; Zillur Rahman, chairman of the audit committee; Syful Islam, director; and Abdul Hamid Miah, managing director, were present at the press conference among others.