Elevated LeverageRapid debt accumulation to fund asset growth materially increases refinancing and interest-rate exposure. A higher leverage ratio reduces financial flexibility, raises funding-cost sensitivity, and magnifies downside if asset quality weakens or credit spreads widen, posing a structural risk to capital stability.
Volatile Operating Cash FlowMulti-year negative operating cash flow before a one-year rebound signals weak cash conversion of accounting profits. Persistent volatility undermines confidence in self-generated funding for loan growth, dividends, or reserves, increasing reliance on external debt and raising structural liquidity risk in tighter markets.
Margin Compression RiskReported margin compression suggests per-loan profitability is under pressure, potentially from rising funding costs, competition, or increased credit provisioning. If margins remain constrained, sustaining past earnings growth will require higher volumes or cost reductions, which may be harder to achieve amid higher leverage.