Religious banking

While the Catholic financial institution Pax-Bank claims in its advertising that it adheres to ethical investment policies, it has had to apologize to investors after revelations that it misled its customers by investing in defense contractors, tobacco companies and a contraceptive manufacturer.

"We regret it, and will immediately rectify the error on Monday, without putting our customers at a disadvantage," said Christoph Berndorff, the chairman of Pax-Bank.

Pax, whose governing body is headed by the provost of Cologne Cathedral, had invested in Wyeth, a US pharmaceutical company that also makes contraceptives. The amount of the investment is about 159,000 euros ($226,620).

Pax, along with ecclesiastical Liga-Bank, admitted that it also had 578,000 euros invested in BAE Systems, the British defense corporation.

The bank also reportedly holds stocks worth more than 800,000 euros in British American Tobacco and Imperial Tobacco, according to an article in the German newsmagazine Der Spiegel.

Berndorff confirmed the report, and said the bank's day-to-day business was managed by Union Investment.

"It slipped through our own control as well, and we are sorry," said Berndorff.

Pax's clients are mostly ecclesiastical institutions, or those with links to churches such as religious orders, hospitals and charities as well as theology students.

"Pax Bank, as a bank for church and charity, has met the specific needs and wishes of its ecclesiastical clients since its founding in the year 1917," stressed the financial institution.

Liga-Bank, which was founded by Catholic priests, is Germany's oldest church bank.

av/dpa/AP
Editor: Kyle James