Company: FRHC
Filing Date: 2025-06-13
Form Type: 10-K
Source: 0000924805-25-000012
Chunk: 115

Company: Freedom Holding Corp.
Filing Date: 2025-06-13
Form: 10-K
Item: Item 1A
Chunk 115
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 or other widespread health emergency, such as in the case of Covid-19 (or concerns over the possibility of such an emergency); persistent or recurring endemics; trade policies and tariffs and their impact on global markets and currency exchange rates; political discord and civil unrest; terrorist attacks; cyber-attacks; war and armed conflict (including the Russia-Ukraine conflict, conflict in Israel and Gaza, India-Pakistan conflict); extreme weather events or other natural disasters; failure of, or loss of access to, technology or operational systems, including any resulting loss of critical data; power, telecommunications or internet outages; or shutdowns of mass transit, could create, and in the cases of civil unrest in Kazakhstan in January 2022, and the Russia-Ukraine conflict, have created, and may continue to create, economic, governmental and financial disruptions, and could lead to operational difficulties (including shutdowns of our offices, quarantine, shelter in place and travel limitations) that could impair our ability to operate our business.

Our financial results depend on interest rate volatility.

Fluctuations in interest rates can impact our earnings. Declines in interest rates can have a detrimental effect on the interest we earn. An increase in interest rates could negatively impact us if we hold securities that have an inverse relationship with interest rates or where market conditions or the competitive environment induces us to raise our interest rates or replace deposits with higher cost funding sources without offsetting increases in yields on interest-earning assets.

For example, as a result of the Russia-Ukraine conflict escalation in February 2022 and a significant increase in market volatility, the NBK raised the base rate from 10.25% to 14.5% by September 2022. Subsequently, with the acceleration of inflationary pressure, the base rate was further increased to 16.75% in December 2022. There was a decrease in the inflation rate by mid-2023, which led to a loosening of monetary policy and a reduction of the rate to 14.25% by mid-2024. Since November 2024, there has been a steady trend of accelerating inflation from 8.4% to 10%. In response, the NBK raised the base rate, which is currently 16.5%. The current market situation in Kazakhstan, the budget deficit, and the deteriorating global economic situation may lead to a continuation of the trend towards a rate hike, which could negatively impact the value of our Kazakhstan interest-sensitive assets and increase our borrowing and funding costs, all of