The Forecast for the Ratings of Freedom Holding Corp.'s Subsidiaries Revised to "Positive", DKnews.kz reports.
On June 28, 2024, the international agency S&P Global Ratings revised the forecasts for the ratings of Freedom Holding Corp.'s subsidiaries, including JSC Freedom Finance, Freedom Finance Europe Ltd, Freedom Finance Global PLC, and JSC Freedom Bank Kazakhstan, from "negative" to "positive". The long-term and short-term credit ratings were also affirmed at "B/B". The forecast for the long-term credit rating of Freedom Holding Corp. itself was revised from "negative" to "stable", and the rating was affirmed at "B-". The ratings of JSC Freedom Finance and JSC Freedom Bank Kazakhstan on the national scale were raised to "kzBBB-".
Improvement in Indicators
S&P analysts noted the gradual improvement in Freedom group's risk management system and capitalization indicators, as well as the reduction of economic risks and improvement in banking supervision in Kazakhstan. These factors may support the group's business development over the next 12 months.
Expectations and Prospects
The S&P Global Ratings report indicates that analysts expect Freedom group to maintain high profits in 2024-2025, supported by revenue diversification through increasing volumes of banking and insurance activities in Kazakhstan. The three-year average (March 2022 – March 2024) core profit to risk-weighted assets ratio measured by S&P Global Ratings remained stable at around 3.4%, which is a high indicator in the international context.
Risk Management System Development
In 2023, Freedom group began creating a consolidated risk management system. Recently, the group hired heads for the risk management, compliance, and legal departments. In May 2024, Freedom group expanded its Board of Directors from six to seven members, four of whom are independent and have international experience.
Prospects for Rating Upgrades
S&P Global Ratings may upgrade the ratings of Freedom group's operating subsidiaries over the next 12 months, provided the group continues to develop its overall risk management and compliance system and maintain a strong level of capitalization.
The revision of the forecasts for the ratings of Freedom Holding Corp.'s subsidiaries to "positive" and the upgrade of the ratings on the national scale indicate positive changes in the group's risk management and capitalization. These steps strengthen Freedom Holding Corp.'s position on the international stage and open up new prospects for further business development.
