The Vatican bank will publish a detailed annual report for the first time in its history today as it seeks to improve financial transparency after several corruption scandals

Vatican Bank to Publish 2012 Annual Report in Transparency Drive

The Vatican bank will publish a detailed annual report for the first time in its history today as it seeks to improve financial transparency after several corruption scandals. The bank, formally called the Institute for Works of Religion, or IOR, will release its 2012 full report at about 8 a.m. Rome time, giving a breakdown of its balance sheet and income statement. The Vatican bank earlier this year reported 2012 profit more than quadrupled to 86.6 million euros ($117 million), according to its website.The earnings publication is part of Vatican Bank President Ernst von Freyberg’s effort to help transform a 71-year-old institution rocked by scandal into a transparent financial firm. In June, Pope Francis named a special commission to help oversee the operations of the bank after Moneyval, the Council of Europe’s monitoring body for money laundering and terrorism financing, called for independent supervision of the bank.

Von Freyberg assumed responsibility for 18,900 clients and took over an organization when he accepted the appointment from Francis’s predecessor, Pope Benedict XVI, in February. His team is reviewing the source of all deposits, from the savings of individual nuns and priests to the operating resources of Catholic congregations with worldwide reach.

Assets Under Management

The bank oversees about 7.1 billion euros in assets, largely in bonds and cash. IOR clients with outposts from Chile to Tanzania manage income, transfers and expenditures out of the bank located in the world’s smallest state, situated in the heart of Rome. The bank doesn’t use deposits for lending and had less than 1 billion euros in equities at the end of last year.

The bank’s profit is at the disposal of the Holy See. Last year it gave the Pope a contribution of 50 million euros. The IOR had 114 employees at the end of 2012 and is housed in a building adjacent to the papal offices just off St. Peter’s Square.

The Vatican is trying to overcome three decades of scandals ranging from the Banco Ambrosiano failure in the 1980s to the freezing of 23 million euros by Italian prosecutors in 2010 in a money-laundering probe.

While admitting no wrongdoing, the Vatican paid $240 million to Banco Ambrosiano account holders in 1984 after the IOR was implicated in the lender’s fraudulent bankruptcy. Ambrosiano’s former chairman Roberto Calvi, dubbed “God’s banker,” was found hanged under London’s Blackfriar’s Bridge in June of 1982 amid the scandal.

The Vatican signed an agreement with Italian authorities July 26 to exchange information about the bank in order to prevent money laundering and terrorism financing. Similar accords have also been signed with other countries, including the U.S.

To contact the reporters on this story: Sonia Sirletti in Milan at ssirletti@bloomberg.net Chiara Vasarri in Rome at cvasarri@bloomberg.net

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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