Vatican central bank reports increased profit, improved management

Image: ICN/JS

Source: Vatican Media

The Administration of the Patrimony of the Apostolic See (APSA) published its balance sheet for 2023, on Monday.

Reaching the objectives of improved management of assets and efficiency of services, the report shows a profit of 45.9 million euros. This made it possible for APSA to contribute 37.9 million euros to the Pope's mission by supporting the Roman Curia (compared to 32.27 million euros in 2022), and to increase its assets by 7.9 million euros.

Archbishop Giordano Piccinotti, president of APSA said: "These results have been achieved with the conviction that we have to work constantly to increase the income stream to cover expenses, but without affecting the Holy See's assets or requiring the sale of institutional properties."

The balance sheet published provides a detailed overview of the two major areas of asset management entrusted to APSA.

Regarding movable assets, the year 2023 showed an economic surplus of 27.6 million euros. This management is carried out by pursuing non-speculative, low-risk, and proven social impact goals, reflecting the Social Doctrine of the Church.

The Administration invested its funds in international securities, fixed-income securities and other financial assets. It provided consulting, financial solutions, and access to capital markets for the Dicasteries of the Curia and other entities of the Holy See, with the aim of diversifying investments and spreading risk while generating the best possible return within the Investment Committee's mandate.

The investment policy continued to be characterised by a proper balance between risk and medium- to long-term profitability. Given uncertain economic conditions in 2023, a more defensive approach was adopted, characterised by a limited equity exposure, a reduced average maturity of the bond segment of around four years and a high level of precautionary liquidity (around 50%).

APSA manages, directly or through companies in Italy and abroad, more than 5,000 real estate units: 4,249 units are managed in Italy, of which 92% of the real estate is in the Province of Rome.

In Rome, the greatest concentration is in areas immediately adjacent to Vatican City State, with 64% located in central districts, 19% in neighbouring districts, and 17% in the suburbs. There are approximately 1,200 real estate units managed abroad (London, Paris, Geneva and Lausanne) and in Italy by subsidiary companies.

The balance sheet shows that real estate management has a surplus of 35 million euros (with operating revenues of 73.6 million euros). Noteworthy is APSA's commitment to achieve ever better results by adapting the technological tools in use, but also collaborating with professionals in the sector to reduce the time between the release of properties and their subsequent rental.

The Administration therefore relies on external collaborations, but these do not concern the direct management of the properties, only the placing on the market as quickly as possible of the real estate units that have become vacant. In addition, the new Leasing Regulations have been rewritten and completed, thus redefining all the conditions that establish mutual procedures and responsibilities regarding renters.

The Fair Value calculation algorithm was also revised to obtain more accurate and current appraisal values. 19.2% of APSA properties are rented at free market rates; 10.4% at subsidised rates; and 70.4% at a zero rate.

Archbishop Piccinotti said: "In addition to ordinary activities in which all of APSA is involved, this Administration plans and carries out various improvement initiatives in compliance with the Church's ethical values. In 2023, the management programme in use for the real estate sector was further implemented; compliance with the regulations of the New Procurement Code saw the adoption of the new management system for the Purchasing Office; and finally, the new unified text of the Lease Regulations was written and came into force. In the coming years, we will embark on a path to adjust the number of resources in order to effectively deal with new administrative responsibilities in view of APSA's being entrusted with management of the real estate of other entities of the Holy See."