Freedom Holding Corp. Quarterly report [Sections 13 or 15(d)]

Quarterly report [Sections 13 or 15(d)]

LOANS ISSUED

LOANS ISSUED

6 Months Ended

Sep. 30, 2025

Loans and Leases Receivable Disclosure [Abstract]

Loans issued as of September 30, 2025, consisted of the following:


	Amount Outstanding		Due Dates	Average Interest Rate	Fair Value of Collateral		Loan Currency

Mortgage loans	$	961,474	October 2025 - May 2051	12.0%	$	961,381	KZT
Corporate loans	243,036		October 2025 - September 2035	17.1%	185,550		KZT
Right of claim for purchased retail loans	234,754		October 2025 - May 2031	15.0%	234,754		KZT
Loans to SME	226,714		October 2025 - June 2032	29.5%	30,484		KZT
Car loans	147,884		October 2025 - September 2032	24.2%	145,926		KZT
Retail loans	9,652		October 2025 - July 2045	29.4%	1,154		KZT
Other	9,066		October 2025 - May 2030	3.0%/ 18.0%	15		USD/KZT//EUR

Allowance for loans issued	(82,005)

Total loans issued	$	1,750,575

The Group provides mortgage loans to borrowers on behalf of the JSC Kazakhstan Sustainability Fund ("Program Operator") related to the state mortgage program "7-20-25" and transfers the rights of claim on the mortgage loans to the Program Operator. The proceeds received from these transfers are presented within funds received under state program for financing of mortgage loans in the Condensed Consolidated Statements of Cash Flows. Under this program, borrowers can receive a mortgage at an interest rate of 7% subject to not less than 20% down payment, for 25 years, and the interest payments received by the Group are recognized as interest income in the Group's Condensed Consolidated Statements of Operations and Statements of Other Comprehensive Income. In accordance with the program and trust management agreement for the program, Group services the transferred loans and remits all repayments of principal it receives plus 4.5% of the 7% interest received to the Program Operator. The interest paid to the Program Operator is recognized as interest expense in the Condensed Consolidated Statements of Operations and Statements of Other Comprehensive Income. The remaining 2.5% of the 7% interest is retained by Group. Under the program and trust management agreement, Group is required to repurchase the rights to make claims on the transferred loans when either loan principal repayments or interest payments are overdue 90 days or more. The repurchase of overdue loans is performed at the loans' nominal value and is presented within repurchase of mortgage loans under the State Program in the Condensed Consolidated Statements of Cash Flows.

Since the Group transfers the rights to make claims on the loans with recourse for loans that are more than 90 days past due, retains part of the interest received on the loans and agrees to service the loans after the sale of the loans to the Program Operator, the Group has determined that it retains control over the loans transferred and continues recognizing the loans, which are accounted for as secured borrowings of the Group in accordance with ASC 860, Transfers and Servicing. As the Group continues to recognize the loans as assets, it also recognizes the associated liability equal to the proceeds received from the Program Operator, which is presented separately as liability arising from continuing involvement in the Consolidated Balance Sheets. This liability accrues 5% interest annually as described above. As of September 30, 2025 and March 31, 2025, the corresponding liability amounted to $476,030 and $503,705, respectively.

As of September 30, 2025 and March 31, 2025, mortgage loans include loans under the state mortgage program "7-20-25" with an aggregate principal amount of $484,600 and $511,851, respectively, were presented within loans issued in the Condensed Consolidated Balance Sheets.

The Group has an agreement with Microfinance Organization Freedom Finance Credit LLP ("FFIN Credit"), a company established and controlled by FRHC's controlling shareholder, chairman and chief executive officer, Timur Turlov, to purchase uncollateralized retail loans. FFIN Credit is a non-bank credit institution that issues loans in Kazakhstan under simplified lending procedures. FFIN Credit was created as a pilot project to test and improve the scoring models used for qualifying and issuing loans. The principal operation of FFIN Credit is to provide loans to customers online using biometric identification and its proprietary scoring process. Following the successful pilot, the Company intends to either acquire FFIN Credit from Mr. Turlov or implement an in-house solution to replicate its functions, ensuring continuity and scalability of the lending operations. The bank has legal ownership over purchase from FFIN Credit uncollateralized retail loans, however, in accordance with U.S. GAAP requirements, the Group does not recognize those loans, since effective control over the transferred loans are maintained by FFIN Credit. Instead, the Group recognizes

the loans receivable from FFIN Credit presented on the Condensed Consolidated Balance Sheets within the loans issued. As of September 30, 2025 and March 31, 2025, right of claims for purchased retail loans amounted to $234,754 and $183,635, respectively.

The total accrued interest for loans issued amounted to $16,562 as of September 30, 2025 and $13,385 as of March 31, 2025.

Loans issued as of March 31, 2025, consisted of the following:


	Amount Outstanding		Due Dates	Average Interest Rate	Fair Value of Collateral		Loan Currency

Mortgage loans	$	924,530	April 2025 - March 2050	11.4%	$	924,386	KZT
Loans to SME	244,217		April 2025 - February 2032	28.6%	35,141		KZT
Right of claim for purchased retail loans	183,635		April 2025 - March 2030	15.0%	183,635		KZT
Car loans	156,340		April 2025 - April 2032	24.2%	155,320		KZT
Corporate loans	149,143		April 2025 - December 2031	19.1%	92,739		KZT
Retail loans	4,847		September 2025 - March 2045	21.2%	663		KZT
Other	7,838		April 2025 - September 2029	18.0%/12.70%/3.00%	29		KZT/EUR/USD

Allowance for loans issued	(75,115)

Total loans issued	$	1,595,435

Credit quality indicators

Freedom Bank KZ uses a loan portfolio quality classification system that indicates signs of a significant increase in credit risk and contractual impairment, depending on the analysis of reasonable and supportable information available at the reporting date. The loan portfolio is classified into "not credit impaired," "with significant increase in credit risk" and "credit impaired" agreements.

Loans "not credit impaired" under the agreement are serviced as usual, there are no primary signs of an increase in credit risk. Agreements classified as "with significant increase in credit risk" represent loans for which there is an increase in the credit risk expected over the life of the agreement compared to the initial risk at the date of recognition of the loan. In practice, the presence of overdue debt on principal and interest for a period of more than 30 days or the absolute probability of default threshold PD exceeds 20%. Agreements classified as "credit impaired" represent loans for which at the reporting date there are signs of impairment, the borrower has been in default for 90 or more days for individuals and 60 or more days for legal entities, the borrower for the last 6 months for individuals and 12 months for legal entities restructured the contract due to the deterioration of the financial condition, the borrower is recognized as credit impaired, the presence of a sign of default, a sign of bankruptcy, the deterioration of the financial performance of the borrower, the presence of other information indicating the presence of a high credit risk.

The table below presents the Group's loan portfolio by credit quality classification and origination year as of September 30, 2025. Current vintage disclosure is the requirement due to first adoption of ASC 326.


	Term Loans by Origination Fiscal Year
	2026			2025			2024			2023		2022		Prior		Revolving loans		Total
Mortgage loans	$	161,750		$	288,978		$	160,218		$	324,647	$	25,881	$	—	$	—	$	961,474
that are not credit impaired	161,413			286,687			157,380			322,008		25,579		—		—		953,067
with significant increase in credit risk	301			1,165			1,547			1,174		232		—		—		4,419
that are credit impaired	36			1,126			1,291			1,465		70		—		—		3,988
Loans to SME	44,384			71,826			96,093			14,411		—		—		—		226,714
that are not credit impaired	43,347			65,538			74,036			10,558		—		—		—		193,479
with significant increase in credit risk	670			1,502			3,026			441		—		—		—		5,639
that are credit impaired	367			4,786			19,031			3,412		—		—		—		27,596
Right of claim for purchased retail loans	133,129			86,820			14,174			628		3		—		—		234,754
that are not credit impaired	133,129			86,820			14,174			628		3		—		—		234,754
Corporate loans	178,193			64,748			95			—		—		—		—		243,036
that are not credit impaired	177,836		—	64,345		—	95		—	—		—		—		—		242,276
with significant increase in credit risk	292			113			—			—		—		—		—		405
that are credit impaired	65			290			—			—		—		—		—		355
Car loans	34,763			4,369			84,849			23,903		—		—		—		147,884
that are not credit impaired	34,680			4,339			79,140			17,068		—		—		—		135,227
with significant increase in credit risk	83			30			1,094			532		—		—		—		1,739
that are credit impaired	—			—			4,615			6,303		—		—		—		10,918
Retail loans	5,650			3,055			883			64		—		—		—		9,652
that are not credit impaired	5,477			2,801			715			62		—		—		—		9,055
with significant increase in credit risk	159			96			16			—		—		—		—		271
that are credit impaired	14			158			152			2		—		—		—		326
Other	162			310			2,169			6,388		37		—		—		9,066
that are not credit impaired	162			310			2,162			6,388		37		—		—		9,059
with significant increase in credit risk	—			—			—			—		—		—		—		—
that are credit impaired	—			—			7			—		—		—		—		7
Total	$	558,031		$	520,106		$	358,481		$	370,041	$	25,921	$	—	$	—	$	1,832,580

The table below presents the Group's loan portfolio by credit quality classification as of March 31, 2025.


	Term Loans by Origination Fiscal Year
	2025		2024		2023		2022		2021		Prior		Revolving loans		Total
Mortgage loans	$	336,535	$	186,816	$	370,588	$	30,591	$	—	$	—	$	—	$	924,530
that are not credit impaired	336,051		184,610		367,918		29,876		—		—		—		918,455
with significant increase in credit risk	410		1,361		1,402		340		—		—		—		3,513
that are credit impaired	74		845		1,268		375		—		—		—		2,562
Loans to SME	98,556		126,835		18,826		—		—		—		—		244,217
that are not credit impaired	96,338		109,461		15,647		—		—		—		—		221,446
with significant increase in credit risk	1,185		3,612		663		—		—		—		—		5,460
that are credit impaired	1,033		13,762		2,516		—		—		—		—		17,311
Right of claim for purchased retail loans	151,237		30,702		1,688		8		—		—		—		183,635
that are not credit impaired	151,237		30,702		1,688		8		—		—		—		183,635
with significant increase in credit risk	—		—		—		—		—		—		—		—
that are credit impaired	—		—		—		—		—		—		—		—
Car loans	5,974		116,459		33,907		—		—		—		—		156,340
that are not credit impaired	5,974		110,871		26,014		—		—		—		—		142,859
with significant increase in credit risk	—		1,603		837		—		—		—		—		2,440
that are credit impaired	—		3,985		7,056		—		—		—		—		11,041
Corporate loans	148,599		470		74		—		—		—		—		149,143
that are not credit impaired	146,785		470		74		—		—		—		—		147,329
with significant increase in credit risk	1,813		—		—		—		—		—		—		1,813
that are credit impaired	1		—		—		—		—		—		—		1
Retail loans	3,774		1,066		7		—		—		—		—		4,847
that are not credit impaired	3,682		887		5		—		—		—		—		4,574
with significant increase in credit risk	34		18		—		—		—		—		—		52
that are credit impaired	58		161		2		—		—		—		—		221
Other	232		1,237		6,323		46		—		—		—		7,838
that are not credit impaired	232		1,229		6,323		46		—		—		—		7,830
with significant increase in credit risk	—		—		—		—		—		—		—		—
that are credit impaired	—		8		—		—		—		—		—		8
Total	$	744,907	$	463,585	$	431,413	$	30,645	$	—	$	—	$	—	$	1,670,550

Aging analysis of past due loans as of September 30, 2025 and March 31, 2025, is as follows:


	September 30, 2025
	Loans 30-59 Days past due		Loans 60-89 days past due		Loans 90 days or more past due and still accruing		Current loans		Total
Mortgage loans	$	2,787	$	1,632	$	3,988	$	953,067	$	961,474
Loans to SME	2,911		2,728		27,596		193,479		226,714
Right of claim for purchased retail loans	—		—		—		234,754		234,754
Corporate loans	312		93		355		242,276		243,036
Car loans	1,007		732		10,918		135,227		147,884
Retail loans	207		64		326		9,055		9,652
Other	—		—		8		9,058		9,066

Total	$	7,224	$	5,249	$	43,191	$	1,776,916	$	1,832,580


	March 31, 2025
	Loans 30-59 Days past due		Loans 60-89 days past due		Loans 90 days or more past due and still accruing		Current loans		Total
Mortgage loans	$	2,835	$	678	$	2,562	$	918,455	$	924,530
Loans to SME	3,325		2,135		17,311		221,446		244,217
Right of claim for purchased retail loans	—		—		—		183,635		183,635
Car loans	1,548		892		11,041		142,859		156,340
Corporate loans	730		1,083		1		147,329		149,143
Retail loans	36		16		221		4,574		4,847
Other	—		—		8		7,830		7,838

Total	$	8,474	$	4,804	$	31,144	$	1,626,128	$	1,670,550

The activity in the allowance for credit losses for the six months ended September 30, 2025 and 2024 is summarized in the following tables.


	Allowance for credit losses
	Mortgage loan		Loans to SME		Corporate loans		Retail loans		Car loans		Right of claim for purchased retail loans		Other		Total
March 31, 2025	(10,698)		(35,194)		(2,640)		(760)		(8,466)		(17,332)		(25)		$	(75,115)
Charges	(2,457)		(17,376)		(2,077)		(1,049)		(2,643)		(19,555)		(5)		(45,162)
Recoveries	10,033		5,427		2,705		225		1,976		11,214		—		31,580
Write off	3		—		—		—		—		—		—		3
Forex	542		3,377		187		97		717		1,769		—		6,689
September 30, 2025	$	(2,577)	$	(43,766)	$	(1,825)	$	(1,487)	$	(8,416)	$	(23,904)	$	(30)	$	(82,005)


	Allowance for credit losses
	Mortgage loan		Loans to SME		Corporate loans		Retail loans		Car loans		Right of claim for purchased retail loans		Other		Total
March 31, 2024	(3,034)		(19,558)		(10)		(150)		(14,260)		(6,575)		(31)		$	(43,618)
Charges	(1,942)		(14,386)		(225)		(244)		(2,687)		(4,432)		(27)		(23,943)
Recoveries	780		4,525		17		47		5,193		4,534		—		15,096
Write off	—		43		—		4		260		—		30		337
Forex	261		1,768		9		18		916		466		—		3,438
September 30, 2024	$	(3,935)	$	(27,608)	$	(209)	$	(325)	$	(10,578)	$	(6,007)	$	(28)	$	(48,690)