Secretive Vatican Bank Takes Step To Transparency
By NICOLE WINFIELD
VATICAN CITY (AP) â¿¿ 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.
Net earnings at the bank, known as the Institute for Religious Works, rose more than four-fold to 86.6 million euros ($116.95 million) in 2012, the report said. More than 50 million euros of that was given to the pope for his charitable works.
The improvement in earnings was driven by profits made on the value of securities that the bank held and sold â¿¿ net trading income rose to 51.1 million euros from a loss of 38.2 million euros in 2011.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 euros in gold, metals and precious coins, owned a real estate company and was bequeathed two investment properties worth 1.9 million euros. It also made some 25.8 million euros in loans in 2012. The Vatican has long insisted the IOR isn't a bank but a unique financial institution aimed at managing assets for religious or charitable works â¿¿ a distinction that presumably helped it avoid typical banking regulations. Yet in the past year, the IOR has slowly revealed itself to work very much like a bank, providing asset management services to its clients, earning some 12.2 million euros in fees and commissions for such services in 2012 and making loans.
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