Company: FRHC
Filing Date: 2025-02-07
Form Type: 10-Q
Source: 0000924805-25-000002
Chunk: 41

Company: Freedom Holding Corp.
Filing Date: 2025-02-07
Form: 10-Q
Item: Part I, Item 2
Chunk 41
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2023. 

Banking Segment

In the nine months ended December 31, 2024, total expenses, net in our Banking segment increased primarily due to increase in interest expense on securities repurchase agreements within this segment, an increase in general and administrative expense, an increase in payroll and bonuses expense and provision for credit losses/(recoveries), reflecting the general growth of Freedom Bank KZ's operations between the two periods. 

Insurance Segment

In the nine months ended December 31, 2024, total expenses, net in our Insurance segment increased mainly due to $148.7 million increase in fee and commission expense from agency fees, $4.3 million increase in stock based compensation, $122.0 million increase of insurance claims incurred, net of reinsurance due to the increase of insurance portfolio,$13.4 million increase in general and administrative expense due to the charity and $12.8 million increase in payroll and bonuses expense due to the increase in headcount and bonuses paid. These increases are attributable to the overall growth of our insurance operations between the two periods. These increases were partially offset by the effects of decrease in interest expense.

Other Segment

In the nine months ended December 31, 2024, total expenses, net in our Other segment increase was driven by increases in general and administrative expenses, payroll and bonuses, interest expense and fee and commission expense. The increase of $59 million in general and administrative expense in the Other segment was attributable to our overall growth and the addition of new subsidiaries. There was a $36 million increase in payroll and bonuses in the Other segment which is mostly attributable to the overall growth of our operations as well as the addition of new subsidiaries. The other main factors contributing to the increase were our charity and sponsorship activities. Our charity and sponsorship expense increased by $31.4 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, and to the organization of a chess tournament in the USA.  Interest expense in the Other segment increased by $19.6 million, mainly attributable to an increase in interest expense from the debt securities issued by Freedom SPC. There was an increase of $9.7 million in fee and commission expense in the Other segment, which is mostly attributable to increased bank commission expense for payment services due to an increase of payment processing operations at certain Paybox subsidiaries. There was also an increase of