Scandal-hit Vatican bank turns to French financier for redemption

Vatican bank has come under scrutiny over allegations of corruption, money laundering and lack of transparency

Pope Francis greets the crowd during his Sunday address

French financier Jean-Baptiste de Franssu has been appointed as the new president of the scandal-marred Vatican bank.

Mr de Franssu will head the troubled bank, formally known as Institute of Religious Works (IoR), which has come under intense scrutiny over the past year following allegations of money laundering and lack of transparency.

The Holy See said it will restructure the two sections of the Administration of the Patrimony of the Vatican, or APSA, which handles income and spending, prepares budgets and acts as a central accounting department and purchasing office.

The announcement comes just a day after the bank reported a disastrous financial update, with net profits falling to 2.9 million euros (£2.3m) in 2013 from 86.6 million euros (£68.8) a year earlier.

The decline in profits was mostly due to a 14.4 million euros loss attributed to what it described as a ''donation" of securities to a Holy See foundation, a series of write-downs and the fluctuation in the value of the bank's gold reserves.

The Vatican also said it had blocked 1,239 individual and 762 institutional client accounts and terminated around 3,000 accounts.

Outgoing president Ernst von Freyberg, a German industrialist appointed by Pope Benedict last year, told Bild newspaper the bank is now "clean" and conceded that ''dubious" investments have resulted in costs of more than 45 million euros ($60 million).

Among the recent scandals, Monsignor Nunzio Scarano, a former senior Vatican accountant who had close ties to the IoR, is currently on trial accused of plotting to smuggle millions of dollars into Italy from Switzerland in order to help rich friends lower their tax bills.