Paraguay's Peña resigns as Ueno Bank crisis locks millions out of savings
- President Santiago Peña resigned on Thursday after Paraguay's central bank took over Ueno Bank, leaving about three million customers unable to reach their money.
- Opposition lawmakers had moved to impeach him over alleged conflict of interest, which he denies; his Colorado Party backed his removal.
- Vice President Pedro Alliana is expected to take over, pending Congress accepting the resignation.
Paraguay's President Santiago Peña has resigned after the central bank took over Ueno Bank, a digital lender once linked to his business interests, leaving about three million customers unable to access their savings.
Peña announced the decision in a video posted on X on Thursday. "I want to apologise to the people if at any point I failed. It was never my intention to betray the trust you placed in me," he said, adding that his priority was the peace of mind of Paraguayans who trusted their savings to the financial system.
The crisis began on Tuesday when the Central Bank of Paraguay placed Ueno under resolution. Regulators said the bank's solvency ratio had fallen below the required minimum, and the takeover was meant to protect depositors and keep the wider financial system stable.
Why the bank mattered
Ueno grew from a small fintech player into one of the country's bigger digital lenders, serving roughly three million customers in a country of about seven million people. It also handled large sums of public money, including pension funds. PM News reported that about $380m of Social Security Institute money was held there, while another account put Ueno's public funds at close to $850m.
Long queues formed outside Ueno branches in the capital, Asunción, as customers tried to withdraw their money. Protests followed on Tuesday and Wednesday evenings, with police using tear gas and water cannons on crowds calling for Peña's removal.
Opposition lawmakers filed an impeachment request, accusing the president of conflict of interest, regulatory failures and mishandling of public funds. PM News reported that 35 lawmakers signed the motion, but the opposition needed at least 53 votes in the 80-member lower house to advance it.
Peña denied wrongdoing, rejecting suggestions that his past stake in Grupo Vázquez, the conglomerate that controlled Ueno, influenced his conduct. He sold his shares last year, according to Punch. His conservative Colorado Party backed his removal on Thursday while Congress debated the request.
Central Bank president Carlos Carvallo stepped down earlier in the crisis after Peña asked for his resignation. Peña also signed a law setting a five-business-day limit for returning most depositors' funds, but the measures did not calm the streets.
Vanguard reported that eight Ueno executives had been detained and their assets frozen as investigations widened. Under Paraguay's deposit protection scheme, eligible deposits are guaranteed up to about $38,000 per customer, and the central bank has outlined arrangements for reimbursing customers.
The central bank has insisted Ueno's troubles do not signal a wider banking crisis and that the rest of the financial system is working.
What happens next
Vice President Pedro Alliana is expected to take office, pending Congress accepting Peña's resignation. The sources did not say when that decision would be taken. Peña, who took office in August 2023 on a five-year term, used his farewell message to call for public funds to be protected and for affected customers to get their money back.
