If the Vatican Bank were heading for a stock market listing, it would be a screaming buy. Its managers can talk the talk. “We are tasked . . .” they say (very) early in the 2012 annual report of the Institute for Works of Religion (IOR), as the bank is known. They use “to grow” as a transitive verb. They say IOR has no truck with “hedges and swaps” and no anonymous accounts. In fact, “[we] barely offer loans at all”. The IOR sounds too holy to fail.

But let’s not be cynical. The publication of the report this week – the first in the history of the IOR (founded in 1942) and its predecessor (1887) – is an event of sorts. It offers a glimpse of the numbers attached to this unique and odd institution (the Vatican is not a market economy). It suggests the bank, under intense pressure from outside, is getting serious about transparency. It offers no clues, however, into the murky image it has accumulated amid a litany of past scandals.

The IOR is a tidy little bank. It has €5bn of assets, 19,000 customers and €769m of equity capital. It made a net profit of €86.6m in 2012 – four times the 2011 level. Net interest income fell 20 per cent, but fees and commissions rose at the same rate and net trading income swung from loss to a chunky profit. Costs are rising fairly sharply, though – operating expenses were up 14 per cent, partly due to legal fees.

Here is a hint of the cloud under which the IOR has existed for years, from its association with the collapse of Banco Ambrosiano to recent money laundering allegations. There is also its inability to hold on to managers. Chief executives come and go with depressing regularity. Ernst von Freyberg, the current boss, at least has the merit that he sounds as no-nonsense as a German lawyer and financier should.

The question is often asked: does the Vatican even need a bank? The report does not offer a convincing yes. It says the IOR’s purpose is to offer “a trusted, reliable and effective institution” to safeguard the Catholic Church’s patrimony. The Vatican bank needs to stick to that mission, however defined. And like the Church’s most celebrated festivities, publication of the IOR report should become an annual event.

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