They scrutinised and screened the more than 17,000 accounts held by the bank.

The huge drop in net profits was due to write-downs on millions of pounds’ worth of bad investments in externally-managed funds, made before the reform process began last year, as well as to the €8.3m in fees paid to the financial team from Promontory.

“At the beginning of my mandate, I repeatedly said that I would proceed with zero tolerance for any suspicious activity,” Mr von Freyberg said in a statement.

“It is fair to say that over the past months this often painful but very necessary process has opened the door to a new, unburdened future of the IOR - as a financial service provider that is fully and solely dedicated to serving the mission of the Catholic Church.”

Promontory’s experts found some evidence of suspicious financial activities, which are being investigated by the Vatican’s finance watchdog, the Financial Information Authority.

But the bank insisted that the vast majority of accounts that were closed were owned by respectable people who no longer qualified to be customers because of tighter new regulations rather than any wrongdoing.

“We’ve not thrown these people out because they are criminals,” Max Hohenberg, the bank’s spokesman, told The Telegraph.

“These are lay people who do not fall within four categories that we laid down last July – that customers must be Catholic institutions, individual clergy, employees and pensioners of the Vatican or diplomats accredited to the Holy See.

“So there could be a former Swiss Guard who has ended his service and returned to Switzerland, or foreign ambassadors who are no longer posted to Rome, or doctors who worked for former pontiffs.”

The clean-up was initiated by Pope Benedict XVI but quickened by Pope Francis after his election in March 2013.

It has been costly but appears to have succeeded in turning around the bank’s fortunes - so far this year it has made a net profit of €57.4m.

Now that accounts have been closed and dubious investments off-loaded, a second phase of reform will begin, involving the slimming down of the bank’s remit and the replacement of Mr von Freyburg by Jean-Baptise de Franssu, a French businessman.

Those changes are expected to be announced on Wednesday by Cardinal George Pell, an Australian who heads the Vatican’s Secretariat of the Economy.

The bank has been dogged by accusations of intrigue and even dealings with the Mafia since the 1970s.

Its darkest hour came with the collapse of the Banco Ambrosiano, where the Holy See was the main shareholder, which was accused of laundering money for the Sicilian mob.

The chairman of Banco Ambrosiano, Roberto Calvi - dubbed "God's Banker" - was found hanging from Blackfriars Bridge in London in 1982 in a suspected murder by mobsters for which no one has ever been convicted.