S&P Global Ratings revised from stable to positive the long-term credit ratings outlook of Freedom Holding Corp. and its four main subsidiaries, including Freedom Finance Europe Ltd., which operates in Europe under the Freedom24 brand. The decision was announced on Monday and follows a more favorable assessment of banking sector risk in Kazakhstan, the group's main market. The agency confirmed the long and short-term ratings of the operational subsidiaries at BB-/B and the holding company's rating at B-, having also raised the national-scale ratings of Freedom Finance JSC and Freedom Bank Kazakhstan JSC to kzA.
The outlook revision follows the upgrade of Kazakhstan's sovereign ratings to BBB/A-2 on August 21 and the improvement in the country's economic risk assessment. S&P also revised its banking sector risk assessment for Kazakhstan from 7 to 6, pointing to the continuous improvement in regulation and supervision, the capital accumulated in the system, and sovereign strength. This is the second positive action by S&P on the group since June, when the agency had already upgraded the long-term ratings of the four operational subsidiaries from B+ to BB-.
The agency expects that the easing of inflationary pressures will increase real disposable income and encourage greater participation in the financial market. S&P describes Freedom as Kazakhstan's largest retail brokerage, with a growing presence in Europe, complemented by banking and insurance operations. The positive outlook reflects the possibility of an upward revision in the economic risk assessment for Kazakhstan over the next 12 months, which could allow raising the reference level applicable to banks and investment companies exposed to domestic risk.
The revision comes after the disclosure of first quarter fiscal year 2027 results, ended June 30, with total net revenues of 732.5 million dollars, a 40% increase year-on-year. Total assets reached 14.0 billion dollars and net income was 31.7 million dollars in the quarter. Freedom24's management considered the decision a vote of confidence in the group's trajectory, with CEO Evgenii Tiapkin highlighting the discipline built in capital management, compliance, and risk governance areas.
