Company: FRHC
Filing Date: 2025-06-13
Form Type: 10-K
Source: 0000924805-25-000012
Chunk: 183

Company: Freedom Holding Corp.
Filing Date: 2025-06-13
Form: 10-K
Item: Item 7
Chunk 183
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5 versus 2024:

Brokerage Segment

•In fiscal 2025, the total expenses, net, increased in our Brokerage segment, primarily driven by higher payroll and bonus expenses, which increased by $27.3 million, reflecting our continued efforts to attract and retain top talent. Advertising and sponsorship expenses also increased by $25.6 million, as we intensified marketing activities to expand our customer base. Additionally, stock-based compensation increased by $16.2 million, which was driven by a higher volume of equity awards granted to employees and management, and fee and commission expenses increased by $4.5 million, due to higher customer activity during the period, further contributing to the overall increase. These rises in expenses were partially offset by a decrease in interest expense, mainly related to lower interest paid on securities repurchase agreements, as well as a reduction in general and administrative expenses. 

Insurance Segment

•In fiscal 2025, total expenses, net in our Insurance segment increased  mainly due to a $181.2 million increase in fee and commission expense from agency fee, $158.5 million increase in insurance claims incurred, net of reinsurance due to the increase in insurance portfolio of compulsory motor third-party liability (MTPL) class, $13.6 million increase in payroll and bonuses expense due to the increase in headcount and bonuses paid, $12.3 million increase in general and administrative expense due to the charity, new branch offices and $8.0 million increase in stock compensation expense due to new stock grants, the majority of which vested on the date of issuance as well as the partial amortization of stock grants. These increases were partially offset by the effects of decrease in interest expense by $17.6 million on trading securities and repurchase agreement obligations as a result of changes in securities portfolio.

Banking Segment

•In fiscal 2025, total expenses, net in our Banking segment increased primarily due to $32.6 million increase in interest expense on customer accounts, deposits and customer liabilities portfolio growth, $38.4 million increase in provision for credit losses which is primarily attributable to increased provisions for uncollateralized bank customer loans, collateralized bank customer loans, mortgage loans and right of claim for purchased loans which were partially offset by the recovery of car loans. The increase in provisions was mainly due to deterioration in assumptions used in calculation of probability of default as well as the change of estimate as a result of currency depreciation. In addition, total expenses, net in our Banking segment increased due to $16.