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Secretive Vatican bank takes step to transparency

world Updated: Oct 01, 2013 12:21 IST
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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.

Earnings at the bank, known as the Institute for Religious Works, rose more than four-fold in 2012 as net trading income rebounded from a loss in 2011, the report said. The IOR said it earned 86.6 million euro ($116.95 million) as the value of the securities it held and sold rose to 51.1 million euro from a loss of 38.2 million in 2011. More than 50 million euro of that profit was given to the pope for his charitable works.

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 IOR in 2012 had 41.3 million euro in gold, metals and precious coins, owned a real estate company and was bequeathed two investment properties worth 1.9 million euro. It also made some 25.8 million euro in loans in 2012.

The report was released as Rome prosecutors continue to investigate a Vatican accountant, Monsignor Nunzio Scarano, who was arrested in an alleged plot to bring 20 million euro into Italy from Switzerland without declaring it at customs.

Scarano is also under investigation in his native Salerno for allegedly laundering money through his IOR account. His lawyer has insisted the money was clean and that he was only trying to help out friends.

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

It employs 114 people, runs the Vatican pension system and oversees about 6.3 billion euro in customer assets.

Its customer base has been reduced from some 21,000 customers in 2011 to 18,900, thanks to efforts to close inactive accounts. Customers include religious orders, Vatican offices, embassies and employees, individual cardinals, bishops and priests and foreign embassies accredited to the Holy See.