The Institute for the Works of Religion (IOR), also known as the Vatican Bank, announced its thirteenth annual report, revealing a net profit of €32.8 million, marking a 7% increase from the previous year. Total assets under management have also grown, reaching €5.7 billion. The IOR serves over 12,000 clients across more than 110 countries. A dividend of €13.8 million will be provided for the Pope. The bank's president highlighted the IOR's strong financial standing, with a high Tier 1 capital ratio.
13 days ago
The Institute for the Works of Religion (IOR), also known as the Vatican Bank, reported a net profit of €32.8 million (approximately $38 million) for 2024, marking an increase from €30.6 million ($35 million) in 2023 1 2. This positive result was attributed to factors such as increased interest and commission margins, as well as effective cost control 2. The IOR's total assets under management also grew, reaching €5.7 billion, up from €5.4 billion the previous year 2.
The IOR's improved financial performance enabled it to issue a dividend of €13.8 million (approximately $15.8 million) 2. Pope Francis has directed these funds towards supporting religious and charitable projects 1. This allocation aligns with the IOR's mission to serve the Catholic Church and contribute to its charitable endeavors worldwide 2.
The IOR's Tier 1 capital ratio, a key indicator of financial strength, reached 69.43% in 2024, a significant increase from 59.8% in 2023 1 2. This robust ratio positions the IOR among the most financially solid institutions globally in terms of capitalization and liquidity 1. The bank emphasizes its prudent dividend policy to maintain adequate capital levels, ensuring operational sustainability and client protection, especially given the absence of a lender of last resort within the Vatican 1.
The IOR has been at the center of financial scandals in the past, including the Banco Ambrosiano scandal 1. In response to these issues, the IOR has undergone significant reforms to enhance transparency and accountability 1. These reforms include strengthening key functions, hiring specialized personnel, and investing in digital and IT infrastructure 2. The IOR played a role in uncovering the London property scandal, further demonstrating its commitment to financial vigilance 1. Cardinal Christoph Schönborn, president of the commission overseeing the IOR, has acknowledged the Institute's evolution into a solid point of reference for the Church 1.
The Church clarifies principles for ethical financial institutions.
The Catholic Church addresses the principles for ethical financial institutions through its social doctrine, emphasizing the importance of human dignity, ethics, solidarity, and the common good in economic policies . The Church's teaching provides principles for reflection, criteria for judgment, and guidelines for action in the financial sector .
Here's a breakdown of these principles:
Primacy of the Human Person: At the heart of the Church's stance on financial ethics is the belief that economic systems should serve people, not the other way around . Financial institutions should prioritize human dignity, ensuring that their practices do not exploit or marginalize individuals .
The Common Good: Financial activities should contribute to the well-being of society as a whole . This involves promoting justice, fostering a spirit of brotherhood, and recognizing the common destiny of all people .
Condemnation of Usury: The Church has consistently condemned usury, which is the practice of lending money at exorbitant interest rates . Pope Benedict XIV stated that usury is a sin and vice, and it assumes various forms to drive people into ruin . Pope Francis has also spoken against usury, stating that it kills life, tramples on the dignity of people, is a vehicle for corruption and hampers the common good .
Transparency and Accountability: The Church emphasizes the need for transparency and accountability in financial matters . Financial reports should be prepared and published to demonstrate how the temporal goods and financial resources of the Church and its institutions are being managed .
Financial Intelligence and Security: The Holy See has established institutions and norms to prevent and counter illegal activities such as money laundering, financing of terrorism, and the proliferation of weapons of mass destruction . The Financial Intelligence Authority (FIA) was established to strengthen measures against potential illicit activities in the monetary and financial sectors . The Financial Security Committee coordinates the competent authorities of the Holy See and Vatican City State in preventing and countering money laundering, the financing of terrorism, and the proliferation of weapons .
Ethical Investments: When investing money, people should exercise diligence and be guided by those who excel in doctrine and virtue to avoid cupidity, which is the source of all evil .
In summary, the Church's teachings on ethical financial institutions stress the need for these institutions to prioritize human dignity and the common good, act with transparency and accountability, and avoid practices such as usury.