A major financial crisis in Paraguay has left about 3 million people struggling to get access to their bank accounts and put hundreds of millions of dollars in public funds at risk. The crisis has been caused by the collapse of Ueno Bank, the country’s major digital bank, earlier this week. The financial crisis further triggered a political storm in the country, resulting in the impeachment of President Santiago Peña.
President Peña was arrested on Friday (November 6, 2026), minutes after his impeachment. He was subsequently placed under house arrest. Peña had tendered his resignation a day earlier, but the Senators did not accept it and proceeded to initiate impeachment proceedings against him on the grounds of misconduct in office.
Peña was found guilty of “dereliction of duty” and removed from office. He has been succeeded by Pedro Aliana, who was serving as Vice President. President Santiago Peña is now facing a criminal investigation due to his previous association with the Grupo Vazquez business conglomerate, which controlled Ueno Bank.
Paraguay’s Central Bank took over Ueno Bank on November 3, 2026, after regulators found that it had fallen far below the legally required solvency level. The bank’s deposit accounts were subsequently frozen, bank executives were arrested, and massive protests erupted across the country, and angry people affected by the collapse took to the streets. The fall of Paraguay’s rapidly growing bank, which claimed more than 60% of Paraguay’s adults as customers, came as a shock for citizens.
The bank, which started as a small financial company, had a rapid expansion and became ubiquitous across the country in less than 5 years. In 2021, Grupo Vazquez acquired Financiera El Comercio and transformed it into Financiera Ueno (Ueno Bank’s predecessor). Later in February 2022, the bank’s digital banking brand was launched. The bank was granted a full banking licence in 2023 and was rebranded. Later in 2024, it acquired and merged with Vision Banco in 2024, further expanding its customer base and operations.
What led to Ueno Bank’s fall?
Ueno Bank’s deterioration was brought about by a series of poor financial decisions, including risky insider lending. The bank had lent substantial amounts of money to businesses connected to its owners. The Central Bank found weaknesses in the bank’s assets, poorly documented transactions and loans to companies linked to Grupo Vazquez. An inspection of Ueno Bank’s accounts revealed that its capital had fallen to less than half the legally required minimum.
The crisis has impacted nearly half of the country’s population and funds around $380 million in deposits and investments with Ueno. Around 32,000 retirees who received pension payments through the bank have also been impacted.
