As the new leader of the 1.4-billion-member Catholic Church, Pope Leo XIV faces many challenges.

Cardinal Robert Prevost has taken the name Leo XIV. The Chicago-born missionary who spent his career ministering in Peru and took over the Vatican’s powerful office of bishops was elected the first pope from the United States in the 2,000-year history of the Catholic Church.

In his first words as Pope Francis’ successor, uttered from the loggia of St Peter’s Basilica, Leo, 69, said, “Peace be with you,” and emphasised a message of peace, dialogue and missionary evangelisation. He wore the traditional red cape of the papacy – a cape that Francis had eschewed on his election in 2013. He spoke to the crowd in Italian and Spanish, but not English.

Among the pressing issues are a widening gap in Vatican finances and church attendance sliding in many Western countries. Doctrinal debates over issues such as ordaining women as clergy and LGBTQ Catholic inclusion portend the coming divisions.

The Vatican’s financial crisis was one of Pope Francis’ last headaches.

Three days before his hospitalisation in February, he ordered the creation of a new high-level commission to encourage donations to the Vatican, which is facing a budget shortfall and growing liabilities for its pension fund.

Although the Vatican has not published a full budget report since 2022, the last set of accounts, approved in mid-2024, included an 83-million-euro ($94-million) shortfall, two sources told Reuters.

The shortfall in the pension fund was estimated to total some 631 million euros by the Vatican’s finance tsar in 2022. There has been no official update to this figure, but several insiders told Reuters they believe it has ballooned.

In terms of doctrinal disputes, Francis created two commissions to consider ordaining women as deacons, who are ministers like priests but cannot celebrate Mass. One of the commissions has not yet completed its work.

Francis also allowed for priests to bless same-sex couples, on a case-by-case basis. His moves drew criticism from conservative Catholics, including a few cardinals, who feared he was watering down the faith.

Victims’ advocates have also said the next leader of the Catholic Church needs to put tackling the issue of clerical sex abuse at the heart of their papacy.

Robert Prevost is the first pope from the United States and a relative unknown on the global stage.

Who is Robert Prevost? The former pope, Francis, brought Prevost to the Vatican in 2023 to serve as the powerful head of the office that vets bishop nominations from around the world, one of the most important jobs in the Catholic Church. As a result, Prevost has a prominence going into the conclave that few other cardinals had.

What is the order of St Augustine? Religious orders — which can include priests, nuns, monks and even lay people — dedicate themselves to a particular type of mission and spirituality. A core value of the order Prevost led is to “live together in harmony, being of one mind and one heart on the way to God.” Six popes before Leo XIV were Augustinians.

Aged 69 and originally from Chicago, Prevost spent most of his career as a missionary in Peru and became a cardinal only in 2023. He has given few media interviews and rarely speaks in public. His choice may signify that the world’s Catholic cardinals had a hard time coalescing around other candidates to succeed Pope Francis, who had led the Church since 2013, and compromised on someone who has shunned the spotlight.

Reverend Mark Francis, a friend of Prevost since the 1970s, told Reuters the cardinal was a firm supporter of his predecessor’s papacy, and especially of the late pontiff’s commitment to social justice issues.

“He was always friendly and warm and remained a voice of common sense and practical concerns for the Church’s outreach to the poor,” said Francis, who attended seminary with Prevost and later knew him when they both lived in Rome in the 2000s.

“He has a wry sense of humour, but was not someone who sought the limelight,” he said.

Prevost first served as a bishop in Chiclayo, in north-western Peru, from 2015 to 2023, and became a Peruvian citizen in 2015, so he has dual nationalities.

Jesus Leon Angeles, coordinator of a Catholic group in Chiclayo who has known Prevost since 2018, called him a “very simple” person who would go out of his way to help others.

Leon Angeles said Prevost had shown special concern for Venezuelan migrants in Peru, saying: “He is a person who likes to help.”

Prevost was born in 1955 and is a member of the global Augustinian religious order, which includes about 2,500 priests and brothers, operates in 50 countries and has a special focus on a life of community and equality among its members.

Cardinal Robert Prevost’s elevation to the first-ever American pope was celebrated by many U.S. politicians online.

That’s despite the fact that the Catholic Church in the United States has become deeply divided in recent years over the issues of abortion, climate change and immigration thanks to a growing conservative influence:

About 75 per cent of US Catholics viewed Pope Francis favourably in 2024, down from a high of about 90 per cent in 2015.

Catholics voted for Trump 59 per cent to 39 per cent over Democrat Kamala Harris, a 12 percentage point swing from 2020, according to exit polling by Edison Research.

How was the new pope chosen? 135 eligible cardinals participated in a secretive voting process known as “the conclave.” The cardinals had no contact with the outside world, and their votes will not be revealed.

Trump spoke to reporters outside the West Wing, saying that for the new pope to be American, “What greater honour can there be?”

“We’re a little bit surprised and we’re happy,” Trump added.

Marco Rubio, a Catholic, issued a statement expressing his “heartfelt congratulations” to the new pope during “a moment of profound significance” for the church.

“The papacy carries a sacred and solemn responsibility,” Rubio’s message said. “May the Holy Spirit impart wisdom, strength, and grace as he shepherds the Church. The United States looks forward to deepening our enduring relationship with the Holy See with the first American pontiff.”

• Reuters and AP reports