Vatican bank has new president as net profit plunges

Friday, July 11th, 2014

A new president has been announced for the scandal-plagued Vatican bank, as it was revealed that the institution’s 2013 net profit had plunged.

Some 3000 accounts have been also purged from the bank in the last year, with almost 400 not meeting stricter client criteria, requiring a close link with the Church.

French financier Jean-Baptiste de Franssau has been appointed by Pope Francis to head the Institute for the Works of Religion (IOR), otherwise known as the Vatican bank.

He replaces German Ernst Von Freyburg, who was appointed by Pope Benedict XVI.

Von Freyburg stepped down as he did not want to be in a full-time role and felt he did not have sufficient experience of asset management.

Both are required as the Vatican bank moves to its next stage of reforms, he said.

Under Von Freyburg, the IOR reviewed client accounts and implemented new procedures designed to prevent scandals and money-laundering.

Secretariat of the Economy prefect Cardinal George Pell introduced the new president and announced other Vatican financial reforms on July 9.

“Our ambition is to become something of a model of financial management rather than a cause for occasional scandal,” Cardinal Pell said.

A truly independent auditor-general is being planned for, who can go “anywhere and everywhere” in the Vatican to ensure the entire financial system is operating correctly, Cardinal Pell said.

He also announced some new members of the IOR’s board, including Mary Ann Glendon, a former US ambassador to the Holy See.

The IOR’s net profit for 2013 was 2.2 million euros, down from 86.6 million euros in 2012.

Extraordinary expenses, losses related to investments in externally managed investment funds and the fluctuation in the value of its gold reserves were cited as reasons.

The IOR also took a 14.4 million-euro hit when it donated securities “with a book value of 15.1 million euros” to “a foundation of the Holy See”, according to a press release.

This is thought to refer to an investment in an Italian religious film production company authorised by retired Cardinal Tarcisio Bertone, when he was president of a commission overseeing the IOR.

In May, Pope Francis said the matter was being studied.

As of June 30, the IOR had 15,495 clients with assets of 6 billion euros invested.

Sources