Paraguay president impeached after digital bank collapse

Summarised from 6 outlets · 11 reports · Updated 7 Nov, 02:10 · Archive

Paraguay's President Santiago Peña was impeached and placed under house arrest after the sudden collapse of Ueno Bank left millions unable to access their savings.

Ueno Bank, Paraguay's largest digital lender with approximately three million customers—roughly 60 per cent of the country's adult population—was seized by the Central Bank of Paraguay on 3 November. The intervention came after regulators detected that the bank's solvency ratio had fallen below 50 per cent, breaching minimum capital requirements. At the time of seizure, the bank held around 850 million dollars in public funds, including approximately 380 million dollars invested by Paraguay's Social Security Institute, which underpins pensions and healthcare for workers.

The seizure left millions of customers unable to access their accounts and pension payments. Crowds gathered at the bank's headquarters in Asunción and its 75 branches seeking to withdraw their money, with scenes of desperation as customers unable to access savings struggled to pay for essentials and medicines.

Ueno Bank had grown rapidly since being granted a full banking licence in 2023. Established in 1976, it remained small until its rebranding, after which it expanded to become a household name, sponsoring Paraguay's national football team and featuring prominently across the country. However, warnings had emerged that the bank may have extended excessive loans to companies associated with its owners.

President Santiago Peña announced his resignation on 5 November following the collapse. However, Congress rejected the resignation and instead voted unanimously to impeach him. The Senate voted 44 to 0, with one abstention, to remove Peña from office on Friday. By impeaching rather than accepting his resignation, lawmakers stripped him of the lifetime Senate seat and immunity granted to former presidents, leaving him vulnerable to prosecution.

Peña held shares in Grupo Vazquez, the parent company owning Ueno Bank, until March 2025. Impeachment charges alleged conflicts of interest, misuse of pension funds, institutional cover-ups and preferential treatment for Ueno. Two loans he received from the bank were cited as evidence of improper financial gain. Peña denied wrongdoing but requested a 72-hour extension to present his defence, arguing he had been given less than 12 hours to answer the charges.

Following his impeachment on Friday, prosecutors ordered Peña's arrest on suspicion of breach of trust, influence peddling and misappropriation of funds. He was placed under house arrest. An arrest warrant was also issued for Carlos Carvallo, former head of Paraguay's central bank, which has been accused of failing in its oversight duties. Carvallo resigned earlier in the week.

Vice-President Pedro Alliana, 52, was sworn in as Paraguay's new president on Friday and will serve until August 2028. He pledged that those affected by the financial collapse would be fully compensated. The public prosecutor's office opened investigations into suspected financial crimes, with 27 individuals formally charged. Three separate investigations were announced focusing on potential problems including excessive credit extended to companies within the same group, possible regulatory breaches and oversight failures.

How it is being reported

• Ousted Paraguay president under house arrest after banking crisis leaves 60% of country unable to access accountsSantiago Peña was detained minutes after he was impeached by Congress, as protesters took to the streets demanding answers after the suspension of the Ueno bank Paraguay’s rightwing president has been placed under house arrest minutes after he was impeached by Congress, amid a severe crisis that left more than half the country’s population unable to access their bank accounts. Santiago Peña is being investigated about allegations he used his political influence to favour a bank that expanded exponentially under his government and was suspended this week after irregularities . Continue…The Guardian · 7 Nov, 01:55
• Crisis-hit Paraguay impeaches president, replaces him with VPPedro Alliana became president of Paraguay on Friday following the impeachment of his predecessor over a massive banking crisis.The Japan Times · 7 Nov, 01:23
• Paraguay's president impeached after collapse of bankSantiago Peña was ousted due to a banking crisis which left millions of people unable to access their money.BBC News · 7 Nov, 01:07
• Paraguay’s Santiago Pena under arrest, new president Pedro Alliana sworn inThe sudden leadership change comes as Paraguay reels from the collapse of the Ueno Bank, a popular lender.Al Jazeera · 7 Nov, 00:31
• Paraguay Senate dismisses President Santiago Pena over bank crisisParaguay’s Senate has ousted President Santiago Pena over the collapse of a major bank tied to his government. Millions of customers' accounts are frozen, with public pension and health care funds also tied up.DW News · 6 Nov, 23:23
• Paraguay: President Santiago Pena under house arrest over bank crisisParaguay’s Senate has ousted President Santiago Pena over the collapse of a major bank tied to his government. Millions of customers' accounts are frozen, with public pension and health care funds also tied up.DW News · 6 Nov, 23:23
• Ueno Bank scandal plunges Paraguay into political crisisSuspected financial fraud, public money at risk and millions of customers affected: Paraguay is in serious crisis following the sudden collapse of Ueno Bank. President Santiago Pena is facing impeachment.DW News · 6 Nov, 20:23
• Why is Paraguay facing a banking and political crisis?Ueno collapse raises questions about state influence and accountability.Al Jazeera · 6 Nov, 18:54
• How Paraguay’s Ueno collapse is only its latest banking crisisPresident Santiago Pena is under fire over links to parent company of collapsed bank.Al Jazeera · 6 Nov, 17:42
• Ueno Bank collapse in Paraguay prompts President Santiago Peña to resignThe accounting black hole at Ueno Bank wipes out public funds, leaves thousands without access to their deposits and drives Paraguay into its worst institutional crisis in years.Euronews · 5 Nov, 14:38
• Ueno Bank collapse in Paraguay triggers political earthquake for Santiago PeñaThe accounting hole at Ueno Bank wipes out public funds, leaves thousands of citizens without access to their deposits and pushes Paraguay into its worst institutional crisis in years.Euronews · 5 Nov, 14:38

In this story: Santiago Peña · Paraguay · Ueno Bank · Pedro Alliana · Central Bank of Paraguay · Carlos Carvallo · Grupo Vazquez · Asunción

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