Company: FRHC
Filing Date: 2025-06-13
Form Type: 10-K
Source: 0000924805-25-000012
Chunk: 176

Company: Freedom Holding Corp.
Filing Date: 2025-06-13
Form: 10-K
Item: Item 7
Chunk 176
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 net for the periods presented.

Year ended March 31,20252024(as a % of total fee and commission expense)Agency fee expense82 %67 %Brokerage services6 %11 %Bank services5 %12 %Exchange services1 %2 %Central Depository services— %— %Other commission expenses 6 %8 %Total fee and commission expense100 %100 %

Fee and commission expense increased by $191.7 million, or 124% in fiscal 2025, as compared to fiscal 2024. The increase was mainly attributable to an increase of agency fee expense of $181.0 million in fiscal 2025 as compared to fiscal 2024. The increase was mainly due to an increase of insurance product sales by Freedom Life, which are outsourced to outside agents. Additionally, there was an increase by $3.3 million in brokerage service expense, which was driven by higher customer activity. The increase in other commission expenses is attributable to increased commissions associated with Paybox that is consistent with the growth of its business activities between the two periods. 

Interest expense 

During the fiscal year ended March 31, 2025, total interest expense remained relatively flat compared to the same period in 2024. 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 8% decline in the average balance, from $2.6 billion during the fiscal year ended March 31, 2024 to $2.4 billion during the fiscal year ended March 31, 2025. Additionally, the average interest rate applied to these obligations decreased from 16% to 14%, further contributing to the reduction in costs. This decline primarily reflects the Company's decision to reduce exposure to market risk by liquidating a portion of the trading portfolio.

Interest expense related to customer liabilities increased as the average balance of customer deposits and brokerage account liabilities grew 8% year-over-year, rising from $1.1 billion to $1.2 billion. This increase was caused by a higher average interest rate, which rose from 7% to 10%, 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 $131.0 million to $356.7 million. The average interest rate on these instruments also increased, from 8