Company: FRHC
Filing Date: 2025-02-07
Form Type: 10-Q
Source: 0000924805-25-000002
Chunk: 31

Company: Freedom Holding Corp.
Filing Date: 2025-02-07
Form: 10-Q
Item: Part I, Item 2
Chunk 31
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(1,185)(47)%Central Depository services495346149 43 %Other commission expenses 17,0623,65213,410 367 %Total fee and commission expense$264,911 $103,116 $161,795 157 %

The following table sets out the components of our fee and commission expense as a percentage of total fee and commission expense, net for the periods presented.

Nine months ended December 31,20242023(as a % of total fee and commission expense)Agency fees expense81 %66 %Brokerage services7 %13 %Bank services5 %15 %Exchange services1 %2 %Central Depository services— %— %Other commission expenses6 %4 %Total fee and commission expense100 %100 %

Fee and commission expense increased by $161.8 million or 157% in the nine months ended December 31, 2024, as compared to the nine months ended December 31, 2023. The increase is mainly attributable to an increase of agency fees 

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expense of  $145.0 million, or 212%, compared to the nine months ended December 31, 2023 and other commission expenses of $13.4 million, compared to the nine months ended December 31, 2023. The increase in agency fees expenses was due to an increase in insurance products sales by Freedom Life, which are outsourced to outside agents. The increase in other commission expenses is attributable to increased commissions associated with Paybox is consistent with the growth of its business activities between the two periods, following our acquisition of Paybox in the fourth quarter of fiscal 2023.

Interest expense

During the nine months ended December 31, 2024, total interest expense remained relatively flat compared to the same period in 2023. However, its composition changed due to shifts in funding sources and interest rate dynamics.

There was a decrease in interest expense on securities repurchase agreement obligations, driven by a 2% decline in the average balance, from $2.6 billion during the nine months ended December 31, 2023 to $2.5 billion during the nine months ended December 31, 2024. Additionally, the average interest rate applied to these obligations decreased from 16% to 14%, further contributing to the reduction in costs. This decline reflects adjustments in our short-term funding strategy and a shift towards more stable, long-term financing sources.

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