Vatican posts significant profit while tackling financial crisis

In 2024, the Vatican, located in Italy, saw a substantial financial improvement as its investment and real estate office reported a profit of 62 million euros, marking a 16 million euro increase from the previous year, 2023. This outcome is regarded as one of the most favorable financial results in recent years, emerging amidst ongoing financial challenges the Holy See has faced in relation to its structural deficit and pension fund shortfalls. The Vatican has been grappling with a deficit between 50 million to 60 million euros annually and a concerning 1 billion euro shortfall in its pension fund, a situation described as critical for the organization under the new leadership of Pope Leo XIV. Pope Leo XIV, who is originally from Chicago and has a background in mathematics, is considered capable of navigating these complexities and has initiated a series of meetings involving various Vatican financial entities shortly after assuming his position. In the 2024 financial report released by the Administration of the Patrimony of the Apostolic See (APSA), it was highlighted that 46 million euros of the profits were allocated towards covering the Holy See's operational costs. The contribution from investments to this profit amounted to 10.5 million euros, while the income generated from real estate was approximately 35 million euros, matching the profits of 2023. Notably, the Vatican boasts a substantial portfolio of real estate, consisting of 4,234 properties in Italy and an additional 1,200 in cities like London, Paris, Geneva, and Lausanne. However, only about 20% of these properties are leased at market rates, with around 70% not generating any income as they serve as housing for Vatican offices or church facilities. The remaining 11% of properties are rented at reduced rates to Vatican employees. There is significant potential for revenue growth through these undervalued real estate assets, but APSA struggles to secure investment funds for the essential renovations that would allow for higher rental prices. Furthermore, the 2024 profits posed a challenge as maintenance costs increased, totaling 3.8 million euros, thereby impacting the overall financial performance of the properties. The Vatican’s historical reliance on these properties for revenue generation has been scrutinized by financial analysts, who see how improvements could boost the revenues significantly. However, the ongoing financial crisis at the Holy See places constraints on budget allocations for necessary renovations. Overall, the introduction of favorable financial results offers a glimpse of optimism amid the financial constraints faced by Pope Leo XIV’s administration, suggesting an extensive need for continued financial reform and management moving forward.