Vatican: £72m profit in first report for 125 years

The Vatican bank, dogged for decades by scandals and opaque dealings, has published the first annual report in its 125-year history.
Pope Francis has vowed to reform the Vatican bank. Picture: ReutersPope Francis has vowed to reform the Vatican bank. Picture: Reuters
Pope Francis has vowed to reform the Vatican bank. Picture: Reuters

The report covered 2012, a tumultuous year that saw its former president ousted in a boardroom battle and leaks of documents on internal disagreements on how it should be run.

Bank president Ernst Von Freyberg, who started his job this year, said yesterday the 100-page report was an attempt to meet the commitment to transparency that Catholics around the world “rightfully expect”.

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A five-member committee appointed by Pope Francis, who has promised to clean up the Vatican’s financial image, is also preparing a report on how to reform the bank, officially known as the Institute for Works of Religion (IOR).

The IOR said that in 2012 it had a net profit of €86.6 million (£72m), more than four times the €20.2m profit in 2011.

The report, audited by KPMG, said the huge increase in net profit was due mainly to favourable trading results and higher bond values.

It said €54.7m of the profit was transferred to the budget of the Holy See to help the pope carry out the Church’s mission around the world. It also revealed the extent of the IOR’s holdings in gold, coins and other precious metals (€41.3m), that it had a stake in an Italian property company, and received two inheritance properties worth about €2m in 2012.

The bank’s stated aim is to hold and manage money for Vatican departments, orders of priests and nuns, Catholic institutions and related entities, clergy and Vatican employees.

But it has been enmeshed in scandals in the past three decades, most notably in 1982 when it was caught up in the fraudulent bankruptcy of Italy’s Banco Ambrosiano, whose president Roberto Calvi was found hanged under a bridge in London.

More recently, it has been caught up in an investigation into money laundering, which the bank denies, and the arrest of a Vatican prelate charged with money smuggling.

Pope Francis has not excluded the possibility of closing down the IOR but most probably it will soon see extensive reform.

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Meanwhile, Pope Francis has revealed he briefly considered not accepting his election as the first non-European pope in 1,300 years when his fellow cardinals chose him in March.

In the long interview with the atheist editor of the left-leaning La Repubblica newspaper published yesterday, he said too many popes in the Church’s long history had been “narcissists” who let themselves be flattered by their “courtier” aides.

He said that on the night fellow cardinals elected him in the Sistine Chapel on 13 March, before formally accepting, he had asked to go to an adjoining room to be alone.

“My head was completely empty and a great anxiety came over me. To make it go away and relax I closed my eyes and every thought went away, even that of not accepting, which the liturgical procedures permitted,” he said.

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