Profit soars at the Vatican Bank

Profit soars at the Vatican Bank

ROME — The 2014 net profit of the Vatican Bank has soared, recovering from the expense of last year’s extraordinary overhaul of the organization’s governance. The Institute for the Works of Religion, as the bank is officially called, reported 69.3 million euros ($76 million) in net profit, more than 20

ROME — The 2014 net profit of the Vatican Bank has soared, recovering from the expense of last year’s extraordinary overhaul of the organization’s governance.

The Institute for the Works of Religion, as the bank is officially called, reported 69.3 million euros ($76 million) in net profit, more than 20 times the 2.9 million euros reported for the previous year. In 2013, the bank lost money on investments and on the decreased value of its gold holdings and had to face the costs of meeting stricter standards against money laundering.

Cleaning up the bank was part of a comprehensive effort to overhaul the Vatican’s administration and its financial institutions — marred by scandal in recent years — initiated by Pope Benedict XVI and continued by Pope Francis, who named some of his close aides to various commissions that scrutinized the Holy See’s financial activities.

Francis has stressed that the bank should increasingly focus on its service to the Roman Catholic Church’s mission all over the world.

On Monday, Jean-Baptiste de Franssu, the bank’s president, said that its long-term strategic plan prioritized the interests of more than 15,000 clients while trying to provide adequate return during a period of ultra-low interest rates in Europe.

“The main focus is on fundamentally improving our overall client service standards and further professionalizing our asset management services,” de Franssu said in a statement.

Last week, news reports said Francis had rejected one of de Franssu’s proposals, which was to invest the Vatican’s assets in a collective, open-ended investment fund in Luxembourg.

During the past two years, the bank’s management has closed thousands of accounts that were either dormant or did not comply with international regulations. In the past, the bank has been accused of covering up malpractice in the accounts’ use and even of allowing Vatican outsiders to avoid taxes.

Only Catholic institutions, priests, members of religious orders, employees of Vatican City state, and diplomats accredited to the Holy See can have accounts at the Vatican bank.

“Certainly the management and the control on bank accounts have increased in transparency in the past two years,” said Carlo Marroni, a Vatican analyst with Italy’s leading financial paper, Il Sole 24 Ore. “But the governance, the structure, and functions have changed little, at least formally.”

Last year, the Italian media speculated over a possible separation between banking services and asset management at the Vatican bank; the separation never took place.

“The Vatican’s finances are still an open working site,” Marroni said.

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