Company: FRHC
Filing Date: 2025-02-07
Form Type: 10-Q
Source: 0000924805-25-000002
Chunk: 276

Company: Freedom Holding Corp.
Filing Date: 2025-02-07
Form: 10-Q
Item: Part I, Item 8
Chunk 276
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 by $49.5 million due to several charitable contributions through our subsidiaries during the nine months ended December 31, 2024.  The most significant contributions were made to the Kazakhstan Chess Federation, Junior Football League of Kazakhstan, Tennis Federation of the Olympic Committee, sponsorship of construction work in the city of Konayev and a chess tournament in the USA. Other operating expenses increased by $8.2 million, mainly due to an increase of other operating expenses at Freedom Bank KZ from banking and other overhead costs. Software support expenses increased by $4.9 million, mainly due to the support of licensed and other software systems. Taxes, other than income tax, increased by $4.0 million, mainly due to the general growth of the Group, including the addition of new subsidiaries.The expansion of our business operations resulted in higher tax liabilities, reflecting our broader market presence and increased operational scale. The increases of $1.6 million in depreciation and amortization expense and $4.5 million in rent expense were driven by the addition of new subsidiaries between the two periods and the overall growth of our operations.

Provision for allowance for expected credit losses

We recognized allowance for credit losses in the amount of  $39.3 million for the nine months ended December 31, 2024, as compared to allowance for credit losses of  $15.5 million for the nine months ended December 31, 2023. The increase between the two periods is primarily attributable to increased provisions for uncollateralized bank customer loans and right of claim for purchased retail loans, driven by a change of estimate for forward-looking information as a result of currency depreciation occurred prior reporting date.

Income tax expense

We had income before income tax of $268.4 million and $330.9 million for the nine months ended December 31, 2024, and December 31, 2023, respectively. Income tax expense for the nine months ended December 31, 2024, and December 31, 2023 was $41.5 million and $51.4 million, respectively. The decrease was primarily due to a decrease in our income before income tax between the two periods. In addition, our effective tax rate during the nine months ended December 31, 2024, was 15.5%, the same as during the nine months December 31, 2023. Although our effective tax rate did not change, there were changes in the composition of the revenues we realized from our operating activities, the tax treatment of