Freedom Holding Corp. (FRHC)

How it makes money

Brokerage revenue comes from trading commissions and fees plus interest earned on margin loans to retail clients, which has grown quickly as the client base has expanded. Banking revenue is interest and fee income from Freedom Bank KZ's lending and deposits. Insurance revenue is premiums net of claims. The other segment bundles telecom, payments and retail sales, cross-sold to the same brokerage and banking customers to keep them inside the group's ecosystem.

Revenue by segment

Freedom Holding's growth has come from being an early, well-capitalized entrant across brokerage, banking and insurance in a region where financial services were previously underdeveloped, not from a structural barrier competitors cannot cross. As the market matures and profitability draws attention, banks and brokers with more capital could contest the same customers.

Brokerage commissions and margin-lending interest move with trading activity and asset prices, which rise and fall with regional economic conditions and investor sentiment; banking revenue is similarly tied to credit demand and interest rates. A downturn in Central Asian markets would compress trading volumes and increase loan losses at the same time.

Key risks

• Geographic concentration in Central Asia — Most revenue is generated in Kazakhstan and neighboring Central Asian and Eastern European markets, so political instability, currency moves or an economic downturn in that region would affect the group disproportionately.
• Exposure to Russia-related sanctions — The company has had historical business ties to Russia and operates in a region exposed to secondary sanctions risk tied to the Russia-Ukraine conflict, which could restrict operations or access to international financial systems.
• Regulation across many jurisdictions — The group holds brokerage, banking and insurance licenses across several exchanges and countries; regulatory non-compliance in any one of them could damage the group's reputation or license to operate more broadly.
• Credit risk from margin lending — A large part of interest income comes from margin loans to retail clients and from the bank's loan portfolio; a market downturn or economic stress could raise defaults and credit losses quickly.