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Two firsts for Vatican Bank

VATICAN (SE): October 1 became an historic day for the Vatican Institute for Works of Religion, more commonly referred to as the Vatican Bank, when for the first time in its 125-year history it published its annual report for 2012.

Posted on, the report is over 100 pages long and reveals a net profit of €88.6 million ($112.58 million). It also reveals that it donated €54.7 million ($71.11 million) to the Holy See budget.

In an interview with Vatican Radio, Ernst von Freyberg said that beyond the novelty of being the first publication, it also represents a bowing to public pressure for greater transparency.

It also contains a description of its work and a summary of activity for the first eight months of this year.

It contains a full audit statement from the worldwide accounting firm, KPMG.

 “You do not have to be an accountant to understand these pages; if you read the introductory letter and the description of our business of 2012 and 2013 you will get a good idea of what the Institute for Religious Works is about,” von Freyberg explained. He added that the accounts have been audited for a long time by international accounting firms, such as KPMG, and insists that this is not unusual.

He said that the only novelty is in the publication of the report.

“The most surprising thing is how unsurprising it is. You see a rather conservatively managed financial institution safeguarding assets, investing in very conservative investments like government bonds and bank deposits. And you will see a highly capitalised institution. At the end of last year our equity ratio was 15 per cent, which is way above what comparable financial institutions would have.”

He said that while the report is primarily for the one billion Catholics in the world who have a right to know what this part of the Holy See does, he added, “They also have a right to understand how we contribute to the wellbeing of the Church around the world.”

Von Freyberg confirms that external help, in this case by the Promontory Group, is necessary for two reasons. “The first is that you need someone with state of the art knowledge… The second is equally important. It is a lot of work. We have 20 to 25 people from the Promontory Group on any given day doing this work. We would not have these resources in-house.”

On September 30, the Vatican Bank came up with another first, when it closed the accounts of foreign embassies from Iran, Iraq and Indonesia.

Reuters reported that the Vatican bank has plans to close the accounts because of concerns over large cash withdrawals by some embassies, without adequate explanation.


Vatican officials were quoted as saying, “The transactions raised concerns particularly because international banking regulators view these countries as high risks for money-laundering and financing of terrorism.”

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