July 9 (Bloomberg) -- Jean-Baptiste de Franssu, the former head of Invesco Ltd.’s European business, was named president of the Vatican Bank as Pope Francis continues reorganization of the Catholic Church’s scandal-tainted financial operations.
Franssu replaces Ernst von Freyberg, a holdover from Francis’s predecessor, Benedict XVI, at the head of the Institute for Religious Works, or IOR, as the bank is known. Under the 51-year-old Frenchman, the IOR will shift more of its 6 billion euros ($8.2 billion) in client funds into asset-management products and push for increased transparency.
“Our ambition is to become something of a model in financial management rather than a cause for occasional scandal,” Cardinal-Prefect George Pell, the Vatican’s top finance official, said at a news conference today to announce de Franssu’s appointment.
Francis, 77, has replaced Vatican leadership in his 16 months as pontiff and made transforming the bank one of his top priorities. Von Freyberg, hired during Benedict’s last days as pope in February 2013, carried out the first steps in Francis’s plan. He wrote down underperforming assets and blocked more than 2,000 accounts to help boost compliance with anti-money laundering policies.
The transition to de Franssu, chairman of mergers-and-acquisitions adviser Incipit, corresponds with a new focus on managing assets at the bank. A new unit will be created to handle the savings of the IOR’s 17,400 clients, which de Franssu said will be directed to what he called ethical investments.
De Franssu was appointed by the pope earlier this year to the Vatican’s council that oversees economic issues. At the IOR, he will lead a new board, which includes former Deutsche Bank Chairman Clemens Boersig, and supervise a fresh management team.
The IOR was set up in 1942 to oversee deposits and execute transactions for clergy and church organizations worldwide. Three decades of scandals, from the Banco Ambrosiano failure in the 1980s to the freezing of 23 million euros by Italian prosecutors in 2010, have tarnished the IOR’s image and prompted Francis’s push for change.
IOR profit fell 97 percent to 2.9 million euros ($3.9 million) last year on writedowns and fluctuations in the value of gold reserves, the Vatican said yesterday.
De Franssu joined Invesco in 1990 and served two years through June 2011 as president of the European Fund and Asset Management Association, according to a Vatican biography released in March.
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