Company: FRHC
Filing Date: 2025-02-07
Form Type: 10-Q
Source: 0000924805-25-000002
Chunk: 153

Company: Freedom Holding Corp.
Filing Date: 2025-02-07
Form: 10-Q
Item: Part I, Item 1
Chunk 153
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, net increased across each of our business segments compared to the three months ended December 31, 2023.

Brokerage Segment

In the three months ended December 31, 2024, total expenses, net in our Brokerage segment increased due to $5.1 million increase in fee and commission expense, which was in turn mainly due to brokerage services expense. Additionally, there was $2.8 million increase in payroll and bonuses, reflecting our efforts to attract and retain top talent. Advertising expenses in this segment also increased by $7.5 million as we intensified our marketing efforts to expand our client base. Furthermore, stock compensation expenses increased by $7.6 million, attributable to new stock grants and partial amortization of old stock grants. These increases were partially offset by $3.9 million decrease in interest expense, primarily driven by lower interest costs on securities repurchase agreement obligations, as well as a decrease in general and administrative expenses and provision for allowance for expected credit loses. 

Banking Segment

In the three months ended December 31, 2024, total expenses, net in our Banking segment increased primarily due to a $10.4 million increase in payroll and bonuses expense, $35.3 million increase in provision for credit losses/(recoveries) due to revision of the approach to calculating the allowance and $4.1 million increase in general and administrative expenses reflecting the general growth of Freedom Bank KZ's operations between the two quarters.

Insurance Segment

In the three months ended December 31, 2024, total expenses, net in our insurance segment increased mainly attributable to $63.5 million increase in insurance claims incurred, net of reinsurance due to the increase of insurance portfolio, $45.5 million increase in fee and commission expense from agency fees, $1.5 million increase in stock based compensation and $1.7 million increase in allowance for credit losses due to the increase of brokerage and other receivables attributable to the overall growth of our insurance operations between the two quarters.

Other Segment

In the three months ended December 31, 2024, total expenses, net in our Other segment increased by $64.6 million, driven by an increase of $34 million in general and administrative expense. The main factors contributing to the increase was an increase in charity and sponsorship. Our charity and sponsorship expense increased by $31.4 million due to several charitable contributions through our subsidiaries during the three months ended December 31, 2024. The most significant contributions were made to the Kazakhstan