Company: FRHC
Filing Date: 2025-11-07
Form Type: 10-Q
Source: 0000924805-25-000041
Chunk: 157

Company: Freedom Holding Corp.
Filing Date: 2025-11-07
Form: 10-Q
Item: Part I, Item 1
Chunk 157
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 losses of $10.4 million for the three months ended September 30, 2024. The increase in the provision during the period was primarily attributable to increased provisions for right of claim for purchased loans, car loans and other loans. The increase in the provision during the period was primarily attributable to a deterioration in macroeconomic conditions and other factors impacting the estimated probability of default in our loan portfolio, and the incorporation of revised forward-looking information. The increase was partially offset by decrease in provision for mortgage loans due to improved credit quality and lower expected losses within the mortgage portfolio.

Income tax expense

We had income before income tax of $60.5 million and $128.5 million for the three months ended September 30, 2025, and September 30, 2024, respectively. Income tax expense for the three months ended September 30, 2025, and 

83

September 30, 2024 was $21.8 million and $14.0 million, respectively. While there have been a decrease in our income before income tax between the two quarters, the increase in the income tax expense was primarily due to the change in our effective tax rate. Such rate during the three months ended September 30, 2025, increased to 36.0%, from 10.9% during the three months ended September 30, 2024. The main factor of an increase was the change in Kazakhstani tax legislation. The change has been enacted during July 2025 with the retrospective effect from calendar 2025. The key change affecting the Company’s tax position is the introduction of a 10% income tax on interest income and realized capital gains from Kazakhstani sovereign securities, which are now subject to taxation within a separate income category. Another reason of the increase in effective tax rate was, that increase occurred as a result of changes in the composition of the revenues we realized from our operating activities, the tax treatment of those revenues in the various jurisdictions where our subsidiaries operate, and the incremental U.S. GILTI tax. In addition, during the three months ended September 30, 2025, we had accrued additional top-up tax resulted from Global Anti-Base Erosion Model Rules (Pillar Two), which have been enacted in certain jurisdictions where our subsidiaries operate.

Net income

As a result of the foregoing factors, for the three months ended September 30, 2025, we had net income of $38.7 million compared to $114.