October 1, 2013

Vatican publishes its first-ever annual bank report

As prosecutors investigate alleged money laundering, the Vatican takes steps to be more financially transparent.

The Associated Press

VATICAN CITY — The Vatican took another step in its efforts to be more financially transparent by publishing a first-ever annual report for the Vatican bank on Tuesday. It comes as Italian prosecutors investigate alleged money laundering there, a Vatican monsignor remains in detention and the pope himself probes the problems that have brought such scandal to the institution.

click image to enlarge

A financial officer stands in front of St. Peter’s Square at the Vatican, which revealed facts about its bank Tuesday.

The Associated Press

Net earnings at the bank, known as the Institute for Religious Works, rose more than four-fold to 86.6 million euros ($116.95 million) in 2012, the report said. More than 50 million euros of that was given to the pope for his charitable works.

The improvement in earnings was driven by profits made on the value of securities that the bank held and sold – net trading income rose to 51.1 million euros from a loss of 38.2 million euros in 2011.

The picture may not be so rosy for 2013, with rising interest rates cutting into profits and millions of euros earmarked for the IOR’s ongoing transparency process, which has involved hiring outside legal, financial and communications experts to revamp its procedures, review its client base and remake its image.

“Overall, we expect 2013 to be marked by the extraordinary expenses for the ongoing reform and remediation process, and the effects of rising interest rates,” bank president Ernst von Freyberg said in a statement.

He said the publication of the report meets the bank’s commitment to providing transparency about its activities.

Aside from the earnings, the 100-page report published Tuesday provides some fascinating reading about the secretive institution.

The Vatican bank was founded in 1942 by Pope Pius XII.

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