Paraguay's President Impeached After a Bank Collapse

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

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

The story of Ueno is not new. Originally, the institution 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 a few years, Ueno scaled up. The institution claimed up to 2.94 million clients, about 60% of the country’s adult population. Its deposits reached 800 million dollars, nearly a quarter of which came from the public sector.

Among its main clients was the Social Welfare Institute, which had placed 355 million dollars there, nearly 9% of its investments. Operators of major Paraguayan dams also kept part of their funds there.

In other words, Ueno not only managed individuals’ savings. The bank also held an important place in the public finances of a country of about 7 million inhabitants. A detail that takes on a whole new dimension today.

Alerts ignored before the bankruptcy

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

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

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

On November 3, the regulator therefore decided to place the institution under resolution. Applications, cards, and transfers ceased to function, while branches closed their doors.

The judiciary then accelerated proceedings. Eight executives, including founder Miguel Vázquez and chairman Juan Manuel Gustale, were arrested. In total, 27 officials and associates are prosecuted for breach of trust and attempted fraud.

Political and banking consequences of the crisis

The banking crisis quickly caught up with the government. On Thursday, Santiago Peña announced his resignation in a video posted on X, citing the country’s stability.

But his departure did not end the parliamentary procedure. Minutes after his announcement, the Chamber of Deputies voted to impeach him by 78 votes to zero, including among members of the Colorado Party, which has ruled for several decades.

The next day, the Senate pronounced his dismissal for breach of duties. This decision also has legal consequences: Peña loses the lifetime seat reserved for former presidents as well as the immunity that accompanies it. He therefore becomes subject to ordinary law.

Meanwhile, depositors are waiting for concrete solutions. Nearly 280,000 clients had no other bank account. Authorities have thus begun opening substitute accounts for them at other institutions.

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