Company: FRHC
Filing Date: 2025-11-07
Form Type: 10-Q
Source: 0000924805-25-000041
Chunk: 33

Company: Freedom Holding Corp.
Filing Date: 2025-11-07
Form: 10-Q
Item: Part I, Item 2
Chunk 33
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 months ended September 30, 2024. The decrease was mainly attributable to a $31.7 million decrease in agency fee expenses in the six months ended September 30, 2025 as compared to the six months ended September 30, 2024, 

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driven by the regulatory cap on commissions paid to insurance agents for policies associated with bank and microfinance loan products, which reduced new business volumes during the period.. Additionally, the decrease was partially offset $8.7 million increase in bank services expense increased during the period, reflecting the continued expansion of our customer base and the growing volume of card transactions within our ecosystem. 

Interest expense

During the six months ended September 30, 2025, total interest expense amounted to $215.7 million, representing a decrease of $54.7 million, or 20%, compared to $270.4 million for the same period in 2024. The decline was primarily driven by changes in average balances and average interest rates across several funding sources.

There was a decrease in interest expense on securities repurchase agreement obligations, driven by a 40% decline in the average balance, from $2.6 billion during the six months ended September 30, 2024 to $1.6 billion during the six months ended September 30, 2025. This decrease primarily reflects the Company's strategic decision to reduce exposure to market risk by liquidating a portion of the trading portfolio, which historically has been primarily funded through repurchase agreements. As a result, the need for repurchase agreements financing declined, leading to both lower average balances and reduced interest expense.

Interest expense on customer liabilities increased to $82.4 million in the six months ended September 30, 2025, compared to $46.8 million in the six months ended September 30, 2024. This increase was driven by the growth of customer deposit base reflecting the continued expansion of the Company’s banking segment.

Interest expense on debt securities issued increased to $31.3 million in the six months ended September 30, 2025, compared to $13.9 million in the  six months ended September 30, 2024. This increase was primarily driven by the placement of several new debt securities between the two periods. The impact of the higher balance was partially offset by a decrease in the average interest rate from 11% to 10%. The increase in debt issuance reflects the Company’s long-term funding and investment strategy.

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The following table provides a summary of