Paraguay: President Pena resigns amid bank crisis

Paraguayan President Santiago Pena resigned Thursday under mounting pressure over the collapse of digital lender Ueno, as lawmakers debated his removal from office.

The bank's accounts, also used to process pension payments, are frozen, leaving millions of customers unable to access their money. Ueno also held hundreds of millions of dollars in public funds.

Why did Pena face impeachment?

Pena's resignation followed the withdrawal of support by Congress President Basilio Nunez and ruling conservative Colorado Party leader Horacio Cartes.

Thirty-five opposition lawmakers and ruling-party dissidents had submitted impeachment articles in the 80-seat Chamber of Deputies, accusing Pena of conflicts of interest, misuse of pension funds and institutional cover-ups linked to Ueno.

Pena sold his shares in Ueno Holding, whose businesses include the bank, in April 2025. Lawmakers also cited two loans he received from Ueno as part of allegations of improper financial gain.

They alleged improper presidential interference in the Social Security Institute, known as IPS, and preferential treatment for Ueno. IPS manages pension and health care funds for most Paraguayan workers and held $355 million at the bank — about 9% of its investments, according to financial manager Gladys Vera.

The motion also questioned Pena's 2023 appointment of central bank chief Carlos Carvallo, who previously chaired Financiera Ueno. According to the document, the central bank approved the company's conversion into a bank just 83 days after his appointment.

What happened to Ueno Bank?

Ueno served about 2.94 million customers, roughly 60% of Paraguay's adult population.

As of last month, the bank said it held roughly $800 million in public-sector deposits — about a quarter of its total deposits — including money from the operators of Paraguay's giant hydroelectric dams.

Paraguay's central bank ordered a resolution or closure process Tuesday after finding that Ueno's solvency ratio had fallen below half the required minimum.

Ueno's app, card payments and transfers stopped working, while branches closed, leaving customers queuing outside unable to withdraw their savings.

Hundreds of employees of Ueno and other companies in its parent conglomerate protested outside the Labor Ministry Thursday, demanding unpaid wages and severance.

Retirees, depositors, students and workers had marched through Asuncion a day earlier, demanding Pena's impeachment and holding signs saying "Give us back our money."

What have authorities done?

Authorities detained eight senior executives, including founder Miguel Vazquez and bank president Juan Manuel Gustale. Prosecutors also charged 27 bank officials and business associates with offenses including breach of trust and attempted fraud.

Lawyers for several detainees said they needed time to review the allegations before commenting.

Pena had sought to reassure customers in a video message Wednesday, pledging legislation "that will return to every saver what they are entitled to as quickly as possible."

The crisis also forced him to cancel his attendance at the Ibero-American summit in Madrid.

Pena, a conservative economist, took office in August 2023 for a five-year term.