Company: FRHC
Filing Date: 2025-02-07
Form Type: 10-Q
Source: 0000924805-25-000002
Chunk: 32

Company: Freedom Holding Corp.
Filing Date: 2025-02-07
Form: 10-Q
Item: Part I, Item 2
Chunk 32
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 the same time, interest expense related to customer liabilities increased as the average balance of customer deposits and brokerage account liabilities grew 9% year-over-year, rising from $1.0 billion to $1.1 billion. This increase was caused by a higher average interest rate, which rose from 7% to 9%, reflecting both market-driven adjustments and an expanded customer deposit base.

Additionally, interest expense on debt securities issued increased, primarily due to a rise in the average balance, from $86.4 million to $318.5 million. The average interest rate on these instruments also increased, from 5% to 10%, reflecting a shift toward long-term financing at higher prevailing market rates. This increase in debt issuance expense aligns with our broader funding strategy to support business expansion and strengthen liquidity reserves.

The following table provides a summary of the monthly average balances and average interest rates for the major categories of interest-bearing liabilities for the nine months ended December 31, 2024 and 2023.

Nine months ended December 31,20242023(amounts in thousands)Average balanceInterest-bearing liabilitiesSecurities repurchase agreement obligations$2,541,767 $2,591,520 Customer liabilities (1)1,107,958 1,015,611 Debt securities issued318,517 86,423 Average ratesSecurities repurchase agreement obligations14.2 %15.9 %Customer liabilities (1)9.0 %6.5 %Debt securities issued10.1 %5.3 %Interest expenseInterest expense on securities repurchase agreement obligations$267,049 $303,242 Interest expense on customer accounts and deposits74,111 49,120 Interest expense on debt securities issued23,912 3,387 Other interest expense36,447 9,901 Total interest expense$401,519 $365,650 

(1) Average balance, average rates, and interest expense relates to interest-bearing deposits.

The following table sets forth the effects of changing rates and volumes on interest. The rate column shows the effects attributable to changes in rate (changes in rate multiplied by prior volume). The volume column shows the effects attributable to changes in volume (changes in volume multiplied by prior rate). The net column represents the sum of the 

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prior columns. Changes attributable to changes in both rate and volume that cannot be segregated have been allocated proportionally based on changes due to rate and the changes due to volume.