New | Vatican bank profits rebound as clean-up continues

The Vatican bank posted a sharp increase in net profit for last year after absorbing the costs of a clean-up that hit earnings in 2013 as part of a wide-ranging drive to tighten financial governance and eliminate abuse, a statement showed on Monday.

The bank, formally known as the Institute for Religious Works, has toughened regulatory standards and closed thousands of accounts, which were either inactive or deemed not to meet new standards required of clients.

Reforming the bank has been one of the most sensitive issues facing Pope Francis as he seeks to overhaul the Vatican administration after years of scandal, ranging from allegations of financial malpractice to cover-ups of child sexual abuse by priests.

After a 2013 net profit of €2.9 million, hit by heavy writedowns on investments and a jump in operating costs to meet new anti-money-laundering standards, net profit rebounded last year to €69.3 million.

The bank has also promised to focus more closely on improving returns for its customers, which include religious orders and charities as well as Church offices, following several years in which management attention has been mainly focused on improving its governance.

Reacting to the environment of ultra-low interest rates in Europe, it is trying to shift clients away from simple term deposits and strengthen management of its €6 billion in customer assets.