Elevated LeverageHigh debt-to-equity increases balance-sheet sensitivity to credit losses and interest-rate moves. Over time this constrains capital flexibility, may require higher provisioning or capital raises, and limits the bank's ability to expand lending without worsening leverage metrics.
Weak Operating Cash ConversionVery low operating cash conversion means reported earnings are not translating into cash from operations. This structural mismatch raises refinancing and liquidity risk, may hide asset-liability timing issues, and limits internally available cash for lending or shock absorption.
Declining EBIT/EBITDA MarginsEroding operating margins signal growing cost pressures or compressing interest spreads. If persistent, margin decline will reduce the bank's ability to absorb credit losses, hinder reinvestment, and pressure return metrics such as ROE, making earnings less durable long-term.