The Institute for Works of Religion’s board has elected a new president, marking a turnover in leadership at the top of the Vatican bank for the first time in more than a decade.
The IOR announced March 25 that the long-serving president of the bank’s Board of Superintendence, Jean-Baptiste de Franssu, will step down on April 28 after a final meeting to approve the bank’s financial statements from the previous year.
De Franssu presided over a period of significant regulatory reform at the bank.
De Franssu will be succeeded by François Pauly, a current board member, in what the bank described in a press notice as a “carefully managed succession process” aimed at “ensuring continuity in the governance of the Institute.”
Pauly, a Luxembourgian national, has served as a member of the Board of Superintendence since 2024. He is currently Chairman of La Luxembourgeoise Group, and sits on the finance council of the Archdiocese of Luxembourg.
According to the IOR statement, he was elected by the bank’s board in December last year, receiving the approval of the IOR’s Commission of Cardinals at the end of January.
He previously served as CEO and Chairman of Banque Internationale à Luxembourg, and until 2021 was a member of the Vatican Pension Fund.
In a statement to press, de Franssu said it was “a profound honor” to serve as president of the Board of Superintendence and that during his time the IOR had been “through a profound structural transformation” after “a long period characterized by management difficulties.”
“This process has enabled the Institute to achieve strong international credibility and to deliver solid financial results, which will be announced shortly for 2025,” he said. “The wide-ranging reforms implemented in close and constructive collaboration with the director general and IOR employees have established a robust governance framework, a culture of transparency, a strong client-service orientation, and well-developed control functions.”
Noting that the Council of Europe’s anti-money laundering watchdog MONEYVAL had awarded the bank its highest rating, de Franssu said the IOR was in a solid position to serve the pope, the Holy See, and its 12,000 clients. “I now humbly pass this important responsibility to my successor,” he said.
The change in leadership follows more than a decade of reform at the once scandal-plagued bank, the Vatican’s only commercial financial institution.
De Franssu, who has led the IOR since 2014, served more than two full five year terms — the maximum allowed under the bank’s governing regulations — after being asked to remain in post by Pope Francis.
Under his leadership, the bank became both profitable and financially transparent, coming under the oversight of international regulations and inspections, posting a series of year-on-year increases in profits despite broader Vatican financial headwinds.
According to the bank’s 2024 annual report, released June 11, the IOR recorded a net profit of 32.8 million euros (almost $38 million), an increase from 30.6 million euros ($35 million) in 2023.
The result enabled the Vatican’s only commercial bank to issue a dividend of 13.8 million euros ($15.8 million), all of which Pope Francis directed to charitable projects.
The bank also reports annually on its Tier 1 capital ratio, an international standard measuring liquidity and institutional risk exposure for financial institutions.
The minimum international banking requirement is a ratio of 6%. The ratio for larger U.S. banks is usually somewhere between 13% and 17%.
In 2024, the IOR had a Tier 1 ratio of 69.4%, up from 59.8% in 2023.
Earlier this year, the bank launched two ethical investment indices “designed to serve as a reference for Catholic investments,” composed of 50 companies each in which the IOR said investment would be fully consistent with Catholic ethical principles.
In 2021, the IOR’s former president became the first person to be handed a jail sentence by a Vatican City court for financial crimes, after defrauding the bank of millions by using his position to sell parts of the IOR’s property portfolio to himself and co-conspirators.
Following that result, De Franssu hailed the recovery of more than 17 million euros by the bank “which had been stolen from the [IOR] before 2014” as “amongst the important achievements” of 2022.
De Franssu and the IOR’s director, Gianfranco Mammí, also became the locus of a battle for wider Vatican financial reform in the Secretariat of State’s London property scandal, after they rebuffed a request for a 150 million euro loan from the secretariat to refinance the building after its acquisition in 2018.
Under pressure from senior Vatican officials to approve it, despite their regulatory concerns, the two bankers flagged the loan request to prosecutors, triggering the investigation that ultimately led to the financial crimes trial, currently being heard on appeal, which convicted former sostituto Cardinal Angelo Becciu and eight others.
While De Franssu and Mammí faced retaliatory action from the Secretariat of State for those events, Pope Francis broadened the influence and importance of the IOR in response, ordering that all curial assets and investments be handled by the bank.
That reform was rolled back by Pope Leo XIV last year, who authorized Vatican dicasteries and institutions to effectively choose their own investment vehicles and managers.