Paraguayan president impeached after bank collapse

The Paraguayan Senate impeached Santiago Peña on Friday November 6, the day after his resignation, following the collapse of Ueno Bank. The digital bank claimed nearly 3 million customers and held around $800 million in public deposits.

Ueno Bank: How a neobank concentrated a significant part of public money

The story of Ueno is not new. Originally, the establishment was just a small financial company founded in the 1970s. Grupo Vázquez bought it in 2021, before obtaining authorization from the central bank to launch a digital bank in November 2023.

In just a few years, Ueno has changed its scale. The establishment claimed up to 2.94 million customers, or approximately 60% of the country’s adult population. Its deposits reached $800 million, almost a quarter of which came from the public sector.

Among its main clients was the Social Welfare Institute, which had invested $355 million thereor almost 9% of its investments. The operators of large Paraguayan dams also kept part of their funds there.

In other words, Ueno did not only manage individual savings. The bank also occupied an important place in the public finances of a country of around 7 million inhabitants. A detail that today takes on a whole new dimension.

Alerts ignored before bankruptcy

The bank’s difficulties did not appear overnight. As early as June, inspectors had identified risky loans granted to people close to its owners.

More specifically, Ueno financed companies linked to its shareholders, exceeding regulatory limits and without obtaining sufficient guarantees. On September 30, 2025, she even transferred nearly $39 million to three of these companies in a single day.

Investigators also discovered poorly documented loans and expenses wrongly recorded as assets. After correction of the accounts, the bank’s capital fell below half of the regulatory threshold.

On November 3, the regulator therefore decided to place the establishment in resolution. Apps, cards and transfers stopped working, while branches closed their doors.

The courts then accelerated the procedures. Eight leaders, including founder Miguel Vázquez and president Juan Manuel Gustale, were arrested. In total, 27 managers and associates are being prosecuted for breach of trust and attempted fraud.

The political and banking consequences of the crisis

The banking crisis quickly overtook power. On Thursday, Santiago Peña announced his resignation in a video published on X, citing the stability of the country.

But his departure did not end the parliamentary procedure. A few minutes after his announcement, the Chamber of Deputies voted for his indictment by 78 votes to zero, including among elected officials from the Colorado Party, in power for several decades.

The next day, the Senate pronounced him impeached for neglect of duty. This decision also has legal consequences: Peña loses the seat for life reserved for former presidents as well as the immunity that comes with it. He therefore becomes subject to ordinary law again.

Meanwhile, depositors are waiting for concrete solutions. Nearly 280,000 customers did not have any other bank accounts. The authorities thus began to open replacement accounts for them with other establishments.

This case reminds us of a reality that is often overlooked: having millions of customers or benefiting from the trust of the authorities does not guarantee the solidity of a bank. Asset quality and financial transparency remain essential. In traditional finance as in crypto, trust does not replace controls.