Declining Net ProfitabilityA sharp reduction in net margin cuts the company's earnings cushion and long-term capital generation. Persistently lower net profitability can constrain reinvestment, reduce retained earnings for loan growth, and signal rising costs or credit losses that weaken sustainable returns.
Weak Cash GenerationNegative free cash flow and an operating-cash-to-net-income ratio near zero indicate poor conversion of accounting profits into spendable cash. For a lender, weak cash generation raises funding and liquidity risks and may force reliance on external financing for loan book growth or distributions.
Falling Return On EquityA material ROE decline signals worsening efficiency in deploying shareholder capital. If sustained, lower ROE undermines shareholder returns and may reflect rising credit costs, margin pressure, or suboptimal capital allocation that limit long-term value creation.