Vatican bank disloses earnings for first time

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The Vatican bank has disclosed its annual report for the first time in its history. Photo: Gabriel Bouys/AFP
12:42 CEST+02:00
The Vatican bank has disclosed its annual report for the first time in its history as it seeks to improve transparency amid several corruption scandals.

The bank, formally called the Institute for Works of Religion, or IOR, said the report is "being made available to the public, as part of a comprehensive undertaking to explain the IOR's mission, activities and financials."

“With the publication of our Annual Report, we are meeting our commitment to provide the transparency about our activities which the Catholic Church, our customers, the Vatican authorities, our correspondent banks and the public rightfully expect,” Ernst von Freyberg, president of the board of superintendence, said in a statement.

The IOR, whose profit more than quadrupled in 2012 to €86.6 million, has also launched a review of all customer relationships and procedures to prevent money-laundering. 

The move follows the arrest of Nunzio Scarano, a senior cleric, in July as part of a corruption scandal that allegedly involved him acting as a front for suspicious payments made through the bank and "interrupting the traceability of money".

The investigators allege that Scarano had used Vatican bank accounts to make transfers on behalf of his friends, including an attempt to move €20 million on behalf of a Neapolitan shipowning family.

As part of its review, the IOR will shut down around 900 accounts, including those held by foreign embassies, Corriere della Sera reported on Tuesday. The decision was reportedly taken after tracking large cash transactions by diplomatic missions of Iran, Iraq and Indonesia.

“The investment policy of the IOR is designed to ensure, first and foremost, that the assets entrusted to us are safe,” added von Freyberg. “Our focus is on conservative management and low exposure to risk."

”2012 was an economically successful year for our customers and the IOR,” von Freyberg continued. “The interest rate environment helped us in two ways: we benefited from relatively high interest income on our existing portfolio, in particular during the early part of the year, and we subsequently benefited from the rise in the market value of interest-bearing securities we held.”

The IOR, which does not lend money, handles funds for all the Vatican departments, Catholic charities and congregations as well as priests and nuns around the world, and manages assets of some €7 billion.

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According to the Vatican's Financial Intelligence Authority, there were six reports of suspicious financial activity in the Vatican in 2012.

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