Freedom Holding Corp 10-Q for FY2023 Q1

Freedom Holding Corp. (FRHC)

10-Q 2022-08-10 For: 2022-06-30

Added on April 08, 2026

About this 10-Q

Freedom Holding Corp filed this 10-Q on August 10, 2022, covering the quarter ended June 30, 2022 (FY2023 Q1).

Headline figures

Quarter ended June 30, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $226.61M; up 55.5% from $145.75M a year earlier
Net income: $61.07M; up 10.2% from net income of $55.42M a year earlier
Diluted EPS: $0.99; up 6.5% from $0.93 a year earlier

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x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the quarterly period ended June 30, 2022

			OR

o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the transition period from ________ to _________


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common	FRHC	The Nasdaq Capital Market


		Pages
PART I — FINANCIAL INFORMATION

Item 1.	Unaudited Condensed Consolidated Financial Statements

	Condensed Consolidated Balance Sheets as of June 30, 2022, and March 31, 2022	3

	Condensed Consolidated Statements of Operations and Statements of Other Comprehensive Income for the Three Months Ended June 30, 2022 and 2021	4

	Condensed Consolidated Statements of Cash Flows for the Three Months Ended June 30, 2022 and 2021	5

	Condensed Consolidated Statements of Shareholders’ Equity for t he Three Months Ended June 30, 2022 and 202 1	7

	Notes to Condensed Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	45

Item 3.	Qualitative and Quantitative Disclosures About Market Risk	64

Item 4.	Controls and Procedures	67

PART II — OTHER INFORMATION		68

Item 1.	Legal Proceedings	68

Item 1A.	Risk Factors	69

Item 6.	Exhibits	70

Signatures		71


	June 30, 2022		March 31, 2022*
			(Recast)
ASSETS
Cash and cash equivalents	$	905,685	$	626,363
Restricted cash	375,118		553,680
Trading securities	1,420,481		1,280,874
Available-for-sale securities, at fair value	219,470		161,364
Brokerage and other receivables, net	511,047		357,746
Loans issued	223,519		94,840
Fixed assets, net	29,203		21,802
Intangible assets, net	9,404		7,441
Goodwill	5,932		5,898
Right-of-use asset	24,394		16,353
Deferred income tax assets	16,263		12,069
Insurance contract assets	7,170		5,712
Other assets	49,508		33,350
TOTAL ASSETS	$	3,797,194	$	3,177,492

LIABILITIES AND SHAREHOLDERS’ EQUITY
Securities repurchase agreement obligations	$	1,030,171	$	872,692
Customer liabilities	1,652,643		1,416,954
Trade payables	82,202		45,230
Insurance contract liabilities	135,563		119,490
Current income tax liability	23,803		14,556
Securities sold, not yet purchased – at fair value	7,706		14,103
Loans received	5,435		3,538
Debt securities issued	115,629		99,027
Lease liability	23,642		16,035
Deferred distribution payments	8,534		8,534
Other liabilities	79,984		20,725
Payable for acquisition	24,966		—
TOTAL LIABILITIES	3,190,278		2,630,884
Commitments and Contingent Liabilities (Note 23)	—		—

SHAREHOLDERS’ EQUITY
Preferred stock - $0.001 par value; 20,000,000 shares authorized, no shares issued or outstanding	—		—
Common stock - $0.001 par value; 500,000,000 shares authorized; 59,542,212 shares issued and outstanding as of June 30, 2022, and March 31, 2022, respectively	59		59
Additional paid in capital	152,532		174,746
Retained earnings	502,990		441,923
Accumulated other comprehensive loss	(39,676)		(63,125)
TOTAL EQUITY ATTRIBUTABLE TO THE COMPANY	615,905		553,603

Non-controlling interest	(8,989)		(6,995)
TOTAL SHAREHOLDERS’ EQUITY	606,916		546,608

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	3,797,194	$	3,177,492


	For The Three Months Ended
	June 30, 2022		June 30, 2021*
			(Recast)
Revenue:
Fee and commission income	$	131,641	$	97,383
Net gain on trading securities	15,582		10,741
Net realized loss on investments available for sale	(593)		(31)
Interest income	49,453		24,662
Insurance underwriting income	24,241		14,076
Net gain/(loss) on foreign exchange operations	5,019		(1,024)
Net gain/(loss) on derivative	1,265		(60)
TOTAL REVENUE, NET	226,608		145,747

Expense:
Fee and commission expense	25,241		23,260
Interest expense	45,829		16,495
Insurance claims incurred, net of reinsurance	16,692		11,296
Operating expense	65,467		33,244
Provision for impairment losses	2,798		293
Other (income)/expense, net	(527)		125
TOTAL EXPENSE	155,500		84,713

NET INCOME BEFORE INCOME TAX	71,108		61,034

Income tax expense	(12,035)		(5,664)

NET INCOME	$	59,073	$	55,370

Less: Net loss attributable to non-controlling interest in subsidiary	(1,994)		(52)

NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	61,067	$	55,422

OTHER COMPREHENSIVE INCOME
Change in unrealized gain on investments available-for-sale, net of tax effect	866		874
Reclassification adjustment relating to available-for-sale investments disposed of in the period, net of tax effect	593		31
Foreign currency translation adjustments, net of tax effect	21,977		3,022

OTHER COMPREHENSIVE INCOME	23,436		3,927

COMPREHENSIVE INCOME BEFORE NON-CONTROLLING INTERESTS	$	82,509	$	59,297

Less: Comprehensive loss attributable to non-controlling interest in subsidiary	(1,994)		(52)

COMPREHENSIVE INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	84,503	$	59,349
BASIC NET INCOME PER COMMON SHARE (In U.S. dollars)	0.99		0.93
DILUTED NET INCOME PER COMMON SHARE (In U.S. dollars)	0.99		0.93
Weighted average number of shares (basic)	59,542,212		59,474,712
Weighted average number of shares (diluted)	59,542,212		59,531,446


			FREEDOM HOLDING CORP.
			(Exact name of registrant as specified in its charter)


FREEDOM HOLDING CORP. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (All amounts in thousands of United States dollars, unless otherwise stated)


	June 30, 2022		June 30, 2021
			(Recast)
Cash and cash equivalents	$	905,685	$	678,717
Restricted cash	375,118		419,046
Total cash, cash equivalents and restricted cash shown as in the statement of cash flows	$	1,280,803	$	1,097,763


	Common Stock			Additional paid in capital		Retained earnings		Accumulated other comprehensive loss		Non- controlling interest		Total
	Shares	Amount

Balance As At March 31, 2021 (Recast)	58,443,212	$	58	$	135,261	$	214,429	$	(40,434)	$	(1,641)	$	307,673

Stock based compensation	1,031,500	—		2,162		—		—		—		2,162
Contribution of shareholder	—	—		1,265		—		—		—		1,265
Translation difference	—	—		—		—		3,022		—		3,022
Other comprehensive reserve	—	—		—		—		907		—		907
Net income (loss)	—	—		—		55,422		—		(52)		55,370

Balance As At June 30, 2021 (Recast)	59,474,712	$	58	$	138,688	$	269,851	$	(36,505)	$	(1,693)	$	370,399

Balance As At March 31, 2022 (Recast)	59,542,212	$	59	$	174,746	$	441,923	$	(63,125)	$	(6,995)	$	546,608

Stock based compensation	—	—		3,697		—		—		—		3,697
Acquisition of insurance companies	—	—		(26,588)		—		—		—		(26,588)
Capital contributions	—	—		677		—		—		—		677
Translation difference	—	—		—		—		21,977		—		21,977
Other comprehensive reserve	—	—		—		—		1,472		—		1,472
Net income (loss)	—	—		—		61,067		—		(1,994)		59,073

Balance As At June 30, 2022	59,542,212	$	59	$	152,532	$	502,990	$	(39,676)	$	(8,989)	$	606,916


	Amount
Balance as of March 31, 2022 (Recast)	$	5,898

Foreign currency translation	34

Balance as of June 30, 2022	$	5,932


	As of March 31, 2022
	As previously reported		Recast		As recasted
ASSETS
Cash and cash equivalents	$	625,547	$	816	$	626,363
Restricted cash	553,680		—		553,680
Trading securities	1,203,479		77,395		1,280,874
Available-for-sale securities, at fair value	1		161,363		161,364
Brokerage and other receivables, net	357,567		179		357,746
Loans issued	94,797		43		94,840
Fixed assets, net	21,365		437		21,802
Intangible assets, net	5,791		1,650		7,441
Goodwill	5,388		510		5,898
Right-of-use asset	15,669		684		16,353
Deferred tax assets	12,018		51		12,069
Assets from insurance activity	—		5,712		5,712
Other assets, net	25,707		7,643		33,350
TOTAL ASSETS	$	2,921,009	$	256,483	$	3,177,492

LIABILITIES AND SHAREHOLDERS’ EQUITY
Securities repurchase agreement obligations	$	775,178	$	97,514	$	872,692
Customer liabilities	1,417,937		(983)		1,416,954
Trade payables	45,229		1		45,230
Liabilities from insurance activity	—		119,490		119,490
Current income tax liability	14,556		—		14,556
Securities sold, not yet purchased – at fair value	14,103		—		14,103
Loans received	3,538		—		3,538
Debt securities issued	99,027		—		99,027
Lease liability	15,315		720		16,035
Deferred distribution payments	8,534		—		8,534
Other liabilities	19,917		808		20,725
TOTAL LIABILITIES	2,413,334		217,550		2,630,884
Commitments and Contingent Liabilities (Note 20)	—		—		—

SHAREHOLDERS’ EQUITY
Preferred stock - $0.001 par value; 20,000,000 shares authorized, no shares issued or outstanding	—		—		—
Common stock - $0.001 par value; 500,000,000 shares authorized;	59		—		59
Additional paid in capital	141,340		33,406		174,746
Retained earnings	426,563		15,360		441,923
Accumulated other comprehensive loss	(53,291)		(9,834)		(63,125)
TOTAL EQUITY ATTRIBUTABLE TO THE COMPANY	514,671		38,932		553,603

Less: Net (loss)/income attributable to noncontrolling interest in subsidiary	(6,996)		1		(6,995)
TOTAL SHAREHOLDERS’ EQUITY	507,675		38,933		546,608

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	2,921,009	$	256,483	$	3,177,492


	Three months ended June 30, 2021
	As previously reported		Recast		As recasted
Revenue:
Fee and commission income	$	97,406	$	(23)	$	97,383
Net gain on trading securities	9,900		841		10,741
Net realized loss on investments available for sale	—		(31)		(31)
Interest income	18,077		6,585		24,662
Income from insurance activity	—		14,076		14,076
Net gain/(loss) on foreign exchange operations	(1,187)		163		(1,024)
Net loss on derivative	(59)		(1)		(60)
TOTAL REVENUE, NET	124,137		21,610		145,747

Expense:
Fee and commission expense	21,863		1,397		23,260
Interest expense	14,272		2,223		16,495
Expense from insurance activity	—		11,296		11,296
Operating expense	30,318		2,926		33,244
Provision for impairment losses	293		—		293
Other expense, net	14		111		125
TOTAL EXPENSE	66,760		17,953		84,713

NET INCOME BEFORE INCOME TAX	$	57,377	$	3,657	$	61,034

Income tax expense	(5,669)		5		(5,664)

NET INCOME	$	51,708	$	3,662	$	55,370

Less: Net loss attributable to non-controlling interest in subsidiary	(52)		—		(52)

NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS	51,760		3,662		55,422

OTHER COMPREHENSIVE INCOME
Change in unrealized gain on investments available-for-sale, net of tax effect	—		874		874
Reclassification adjustment relating to available-for-sale investments disposed of in the period, net of tax effect	—		31		31
Foreign currency translation adjustments, net of tax effect	3,300		(278)		3,022

OTHER COMPREHENSIVE INCOME	3,300		627		3,927

COMPREHENSIVE INCOME BEFORE NON-CONTROLLING INTERESTS	$	55,008	$	4,289	$	59,297

Less: Comprehensive loss attributable to non-controlling interest in subsidiary	(52)		—		(52)

COMPREHENSIVE INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	55,060	$	4,289	$	59,349


	June 30, 2022		March 31, 2022
			(Recast)
Securities purchased under reverse repurchase agreements	$	319,799	$	278,685
Current accounts in clearing organizations	209,233		78,177
Current accounts with commercial banks	101,547		68,933
Petty cash in bank vault and on hand	74,685		37,148
Current account with National Bank (Kazakhstan)	64,416		42,517
Current account with National Settlement Depository (Russia)	52,953		35,860
Current accounts with brokers	31,110		65,085
Accounts with stock exchanges	25,827		11,791
Current account with Central Bank (Russia)	16,923		3,654
Cash in transit	9,151		4,177
Current account with Central Depository (Kazakhstan)	41		336
Total cash and cash equivalents	$	905,685	$	626,363


	June 30, 2022
	Interest rates and remaining contractual maturity of the agreements
	Average interest rate		Up to 30 days		30-90 days		Total
Securities purchased under reverse repurchase agreements
Corporate equity	2.14	%	$	307,522	$	—	$	307,522
Corporate debt	12.68	%	6,290		—		6,290
US sovereign debt	16.50	%	3,554		—		3,554
Non-US sovereign debt	13.77	%	2,409		24		2,433
Total securities sold under repurchase agreements			$	319,775	$	24	$	319,799


	March 31, 2022 (Recast)
	Interest rates and remaining contractual maturity of the agreements
	Average interest rate		Up to 30 days		30-90 days		Total
Securities purchased under reverse repurchase agreements
Corporate equity	10.26	%	$	251,516	$	—	$	251,516
Non-US sovereign debt	3.09	%	9,956		—		9,956
US sovereign debt	0.04	%	9,952		—		9,952
Corporate debt	11.92	%	7,261		—		7,261
Total securities sold under repurchase agreements			$	278,685	$	—	$	278,685


	Weighted Average Interest Rate		Total		Fair Value Measurements at June 30, 2022 using
					Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Units
					(Level 1)		(Level 2)		(Level 3)

Non-U.S. sovereign debt	13.20	%	$	711,097	$	709,105	$	1,174	$	818
Corporate debt	10.40	%	626,482		626,326		—		156
Corporate equity	—	%	56,773		53,218		3,301		254
U.S. sovereign debt	3.02	%	14,696		14,696		—		—
Exchange traded notes	—	%	11,433		11,433		—		—

Total trading securities			$	1,420,481	$	1,414,778	$	4,475	$	1,228

Corporate debt	10.60	%	$	132,372	$	132,372	$	—	$	—
Non-U.S. sovereign debt	11.50	%	84,748		84,748		—		—
U.S. sovereign debt	3.00	%	2,349		2,349		—		—
Corporate equity	—	%	1		—		—		1
Total available-for-sale securities, at fair value			$	219,470	$	219,469	$	—	$	1


	Weighted Average Interest Rate		Total		Fair Value Measurements at March 31, 2022 (Recast) using
					Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Units
					(Level 1)		(Level 2)		(Level 3)

Corporate debt	9.19	%	$	788,111	$	787,516	$	—	$	595
Non-U.S. sovereign debt	12.87	%	374,856		366,560		—		8,296
Corporate equity	—		99,584		94,289		5,042		253
U.S. sovereign debt	2.35	%	10,435		10,435		—		—
Exchange traded notes	—		7,888		7,888		—		—

Total trading securities	—		$	1,280,874	$	1,266,688	$	5,042	$	9,144

Corporate debt	11.09	%	$	145,836	$	145,836	$	—	$	—
Non-U.S. sovereign debt	5.51	%	12,997		12,551		—		446
U.S. sovereign debt	—		2,530		2,530		—		—
Corporate equity	—		1		—		—		1

Total available-for-sale securities, at fair value			$	161,364	$	160,917	$	—	$	447


Type	Valuation Technique	FV as of June 30, 2022		FV as of March 31, 2022 (Recast)		Significant Unobservable Inputs	%

Non-US sovereign debt	DCF	$	—	$	772	Discount rate	13.9%
						Estimated number of years	1 year
Corporate equity	DCF	254		253		Discount rate	20.0%
						Estimated number of years	9 years
Corporate debt	DCF	156		595		Discount rate	45.0%
						Estimated number of years	3 months
Non-US sovereign debt	DCF	818		7,524		Discount rate	69.0%
						Estimated number of years	11 years
Total		$	1,228	$	9,144


	Trading securities		Available-for-sale securities
Balance as of March 31, 2022 (Recast)	$	9,144	$	1
Reclassification to level 1	(1,707)		—
Sale of investments that use Level 3 inputs	(3,943)		—
Revaluation of investments that use Level 3 inputs	(2,267)		—
Translation difference	1		—
Balance as of June 30, 2022 (Recast)	$	1,228	$	1

Balance as of March 31, 2021 (Recast)	$	19,069	$	1
Reclassification to level 3	683		—
Reclassification to level 1	(18,408)		—
Purchase of investments that use Level 3 inputs	10,813		—
Revaluation of investments that use Level 3 inputs	(3,013)		—
Balance as of March 31, 2022 (Recast)	$	9,144	$	1


	June 30, 2022
		Assets measured at amortized cost		Unrealized loss accumulated in other comprehensive income/(loss)		Assets measured at fair value

Corporate debt		$	133,127	$	(755)	$	132,372
Non-US sovereign debt		83,387		1,361		84,748
U.S. sovereign debt		2,988		(639)		2,349
Corporate equity		1		—		1
Total available-for-sale securities, at fair value		$	219,503	$	(33)	$	219,470


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

Mortgage loan	$	131,047	July 2022 - June 2047	10.45	%	$	131,403	KZT
Uncollateralized bank customer loans	73,484		July 2022 - June 2026	14.00	%	—		KZT
Bank customer loans	11,431		January 2022 - September 2045	16.09	%	1,000		RUB
Subordinated loan	5,070		December 2022-April 2024	4.89	%	—		USD
Subordinated loan	1,259		December 2022-April 2024	12.00	%	—		UAH
Car loans	942		June 2024 - June 2029	26.38	%	964		KZT
Other	159		May 2022 - May 2027	2.00	%	—		EUR
Loans issued to policyholders	127		July 2022 - June 2023	13.98	%	384		KZT
Total loans issued	$	223,519


	March 31, 2022 (Recast)
	Interest rate and remaining contractual maturity of the agreements
	Average interest rate		Up to 30 days		30-90 days		Total
Securities sold under repurchase agreements
Corporate debt	12.07	%	$	641,550	$	142	$	641,692
Non-US sovereign debt	10.85	%	222,892		—		222,892
US sovereign debt	0.77	%	7,396		—		7,396
Corporate equity	13.54	%	712		—		712
Total securities sold under repurchase agreements			$	872,550	$	142	$	872,692


	Total
Balance as of March 31, 2021 (Recast)	$	8,592
Short sales	11,478
Repurchase	(4,583)
Net (gain) on trading securities	(1,384)
Balance as of March 31, 2022 (Recast)	$	14,103

Balance as of March 31, 2022 (Recast)	$	14,103
Short sales	574,232
Repurchase	(583,037)
Net loss on trading securities	2,408
Balance as of June 30, 2022	$	7,706


Company	Lender	June 30, 2022		March 31, 2022 (Recast)		Interest Rate		Term	Maturity dates

Freedom Finance Global	Non-Bank	$	1,856	$	—	3	%	6 months	12/27/2022
Freedom Holding Corp.	Non-Bank	3,579		3,538		5	%	26 months	12/31/2022
Total loans received		$	5,435	$	3,538


	June 30, 2022		March 31, 2022
Assets:			(Recast)

Amounts due from policyholders	$	5,031	$	3,500
Claims receivable from reinsurance	799		769
Amounts due from reinsured	33		23
Less provision for impairment losses	(424)		(343)
Insurance and reinsurance receivables:	5,439		3,949

Unearned premium reserve, reinsurers’ share	126		143
Reserves for claims and claims’ adjustment expenses, reinsurers’ share	1,605		1,620

Total	$	7,170	$	5,712


	June 30, 2022		March 31, 2022
Liabilities:			(Recast)

Amounts payable to insured	$	690	$	685
Amounts payable to reinsurers	282		402
Amounts payable to agents and brokers	2,200		1,981
Insurance and reinsurance payables:	3,172		3,068

Unearned premium reserve	22,302		17,985
Reserves for claims and claims’ adjustment expenses	110,089		98,437

Total	$	135,563	$	119,490


	Three Months Ended June 30, 2022		Three Months Ended June 30, 2021
			(Recast)
Net unrealized gain recognized during the reporting period on trading securities still held at the reporting date	$	7,881	$	5,030
Net realized gain recognized during the period on trading securities sold during the period	7,701		5,711
Net gain recognized during the period on trading securities	$	15,582	$	10,741


	Shares	Weighted Average Fair Value
Outstanding, at March 31, 2022	1,049,500	$	40,303
Granted	—	—
Vested	200,942	7,688
Forfeited/cancelled/expired	—	—
Outstanding, at June 30, 2022	848,558	$	32,615


	Classification on Balance Sheet	June 30, 2022
Assets
Operating lease assets	Right-of-use assets	$	24,394
Total lease assets		$	24,394

Liabilities
Operating lease liability	Operating lease obligations	$	23,642
Total lease liability		$	23,642


Twelve months ending March 31,
2023	$	9,834
2024	7,907
2025	5,478
2026	3,192
2027	1,129
Thereafter	506
Total payments	28,046
Less: amounts representing interest	4,404
Lease liability, net	$	23,642
Weighted average remaining lease term (in months)	26
Weighted average discount rate	12		%


	Purchase price allocation As of February 28, 2018

ASSETS
Cash and cash equivalents	$	3,494
Due from banks	2,514
Loans issued	2
Other assets	1,671
Assets from insurance activity	3,729
Deferred acquisition costs	542
Available-for-sale securities, at fair value	15,842
Fixed assets	171
Intangible assets	5,823
Deferred tax assets	141
TOTAL ASSETS	33,929

Deferred income tax liabilities	47
Other liabilities	139
Liabilities from insurance activity	21,667

TOTAL LIABILITIES	21,853

Net assets acquired	12,076

Goodwill	526

Total purchase price	$	7,009
Fair value of non-controlling interest at acquisition	5,593


	Purchase price allocation As of August 22, 2018

ASSETS:
Cash and cash equivalents	$	1,224
Due from banks	1,041
Other assets	17
Assets from insurance activity	45
Current income tax asset	5
Available-for-sale securities, at fair value	1,846
Fixed assets	2
Intangible assets	207
Deferred tax assets	2
TOTAL ASSETS	4,389

LIABILITIES:

Other liabilities	214
Liabilities from insurance activity	74
TOTAL LIABILITIES	288

Net assets acquired	4,101

Goodwill	187

Total purchase price	$	4,288


	As of June 30, 2022		As of March 31, 2022
			(Recast)
Unfunded commitments under lines of credits and guarantees	$	10,639	$	11,292
Bank guarantees	5,354		6,384
Total	$	15,993	$	17,676


	Quarter ended June 30, 2022
STATEMENTS OF OPERATIONS	Central Asia		Europe		U.S.		Russia		Middle East/Caucasus		Total
Fee and commission income (1)	$	9,192	$	84,034	$	1,134	$	37,281	$	—	$	131,641
Net gain/(loss) on trading securities	21,589		(15,424)		(1,731)		11,148		—		15,582
Net realized loss on investments available for sale	(593)		—		—		—		—		(593)
Interest income	38,910		297		4,442		5,804		—		49,453
Income from insurance activity	24,241		—		—		—		—		24,241
Net gain/(loss) on foreign exchange operations	4,268		569		(234)		426		(10)		5,019
Net gain on derivative	1,265		—		—		—		—		1,265
TOTAL REVENUE, NET	98,872		69,476		3,611		54,659		(10)		226,608
Fee and commission expense	10,714		12,427		153		1,926		21		25,241
Interest expense	31,968		2,696		5,407		5,758		—		45,829
Expenses related to Insurance activity	16,692		—		—		—		—		16,692
Operating expense	20,766		11,565		5,267		27,469		400		65,467
Provision for impairment losses/(recoveries)	2,431		—		(3)		370		—		2,798
Other expense/(income), net	(496)		2		(6)		30		(57)		(527)
TOTAL EXPENSE	82,075		26,690		10,818		35,553		364		155,500
NET INCOME BEFORE INCOME TAX	16,797		42,786		(7,207)		19,106		(374)		71,108
Income tax (expense)/benefit	(61)		(7,223)		(1,605)		(3,156)		10		(12,035)
NET PROFIT/(LOSS)	$	16,736	$	35,563	$	(8,812)	$	15,950	$	(364)	$	59,073


	Quarter ended June 30, 2021 (Recast)
STATEMENTS OF OPERATIONS	Central Asia		Europe		U.S.		Russia		Middle East/Caucasus		Total
Fee and commission income	$	6,342	$	71,991	$	969	$	18,081	$	—	$	97,383
Net gain/(loss) on trading securities	8,942		42		(302)		2,059		—		10,741
Net realized loss on investments available for sale	(31)		—		—		—		—		(31)
Interest income	20,829		261		47		3,525		—		24,662
Income from insurance activity	14,076								—		14,076
Net gain/(loss) on foreign exchange operations	1,470		(226)		(36)		(2,232)		—		(1,024)
Net loss on derivative	(59)		—		—		(1)		—		(60)
TOTAL REVENUE, NET	51,569		72,068		678		21,432		—		145,747
Fee and commission expense	2,532		18,480		182		2,066		—		23,260
Interest expense	12,268		1,698		280		2,249		—		16,495
Expense from insurance activity	11,296		—		—		—		—		11,296
Operating expense	11,128		4,792		4,857		12,432		35		33,244
Provision for impairment losses	255		12		—		26		—		293
Other expense, net	47		3		—		75		—		125
TOTAL EXPENSE	37,526		24,985		5,319		16,848		35		84,713
NET INCOME BEFORE INCOME TAX	14,043		47,083		(4,641)		4,584		(35)		61,034
Income tax (expense)/benefit	(114)		(5,862)		849		(537)		—		(5,664)
NET PROFIT/(LOSS)	$	13,929	$	41,221	$	(3,792)	$	4,047	$	(35)	$	55,370