Authorities report advance payments for almost 1.2 million Ueno customers
Paraguayan prosecutors charged former President Santiago Peña with breach of trust and administration for personal gain on Saturday, one day after he was impeached and removed from office over Ueno Bank’s collapse, and the ousted president appeared before prosecutors. A judge ordered Peña held in pretrial detention at a military facility pending the investigation, and Peña has pleaded not guilty.
Carlos Carvallo, who had led Ueno Bank and whom Peña appointed to head Paraguay’s Central Bank in 2023, was also arrested and charged with breach of trust, administration for personal gain and producing false public documents. A judge ordered Carvallo held in pretrial detention at a police facility. Eight Ueno executives, including 36-year-old CEO Miguel Vásquez, were also arrested and charged.
Peña held shares in Ueno Holding even after taking office. In an asset declaration submitted weeks after he became president in 2023, Peña listed shares then valued at around $845,000. Those shares represented around 1.6% of the company’s paid-up capital when he later sold them in March 2025. Prosecutors allege that, while president, Peña used his position to influence public agencies and state-owned entities to maintain deposits with Ueno despite his connections to its parent group.
Ueno Bank’s services abruptly stopped working in the early hours of Tuesday morning, with immediate consequences for millions of Paraguayans who had come to depend on it for everyday transactions and could not reach their money. The collapse affected far more than the bank’s shareholders. Ueno said it had 2.9 million customers, around 60% of Paraguay’s adult population, while the Central Bank said the bank had approximately 1.8 million depositors. By Saturday, authorities said almost 1.2 million customers had received an advance payment under the state’s deposit guarantee fund, but many were still waiting.
Ueno Bank launched as a fintech in 2021 and began operating as a bank in November 2023. NPR described Ueno as one of Paraguay’s most important financial institutions, saying its rise was driven by slick marketing and a digital model centered on convenience and cashback deals; customers could open accounts on their phones and were offered incentives to process payments through the platform.
The bank also held substantial public funds. The Social Security Institute, known as IPS, had around $355 million invested in Ueno, roughly 9% of its portfolio. The sums involved raised questions about how such a young bank came to hold so much public money.
Manuel Ferreira, an economist and former finance minister, told local outlet ABC Color that the collapse raised fundamental questions about how Ueno managed its assets. In a typical bank, shareholders provide only a small portion of the money behind the assets while the bulk comes from customer deposits, Ferreira said. He argued that marketing and discounts helped attract customers but did not create lasting assets, and said a bank’s principal asset is its loan portfolio: the money owed by borrowers.
Many Ueno loans had gone to companies directly linked to the bank’s controlling owners, Grupo Vásquez, Ferreira said, including $146 million in loans to three companies. He also described Ueno’s promissory notes as being signed by the same people on both sides of some transactions.
Ueno Bank’s collapse led to the impeachment and removal of President Santiago Peña, a close ally of President Donald Trump. Peña resigned Thursday and was impeached and removed from office Friday. Pedro Alliana, the country’s vice president, has been sworn in as president to serve the rest of Peña’s term until August 2028.
NPR reported that the crisis had put the spotlight on Horacio Cartes, a tobacco magnate and former president of Paraguay who wields considerable political and economic influence. Cartes handpicked Peña, his former finance minister, to lead the Honor Colorado faction in the 2023 presidential election. Their relationship had become increasingly strained, apparently over Peña’s efforts to establish his own power base within the party.
In September, senators aligned with Cartes sought information from the Central Bank about Ueno’s transactions with related companies and public-sector deposits. After the bank collapsed, Cartes publicly distanced himself from Peña, releasing a public statement on Wednesday calling for an investigation and insisting there should be “no impunity for anyone.” The following day, his faction backed Peña’s impeachment. The move was widely seen as a decisive withdrawal of political protection for Peña and an opportunity for Cartes to reassert his influence.
Protesters began gathering a few blocks from Paraguay’s Congress building on Tuesday, after the collapse was announced, and hundreds gathered outside Congress on Friday to protest both their inability to access their money and what they saw as a broader failure of accountability. Elizabeth González, a 28-year-old barista at a café in downtown Asunción, said, “People don’t have any trust.” Earlier, one customer had walked into the café and insisted on paying in cash. He no longer trusted any bank. González said, “If Paraguayans themselves aren’t confident right now, foreign investors will be less so.”
Elodia Saveredo, a 71-year-old housewife who sells her own handicrafts online, said, “I came not because it affects me personally, but because it affects all of Paraguay.” Batarram Caballero, a 23-year-old fifth-year biochemistry student and president of the student center at the National University of Asunción, said classmates had money frozen that they needed to cover basic expenses. “It wasn’t a lot of money, perhaps, but it was money for their bus fare. It was money for their food,” Caballero said. “To hear that and not be able to do anything because I don’t have the resources to help them is very discouraging.”
Caballero believes the crisis was foretold by an intense campaign in the days before accounts were frozen, when Ueno sent messages urging students to put their money there. “They were bombarding us with messages telling us to put our money there,” she said. “There were also rumors about what was already on the cards.”
Protesters outside Congress saw the bank collapse and its aftermath as evidence of broader accountability problems in Paraguay’s political establishment. Rodrigo Piatti, a 45-year-old activist with the anti-corruption campaign group Comisión Escrache Ciudadano, said real change would come only if the political establishment, including Cartes, were challenged. “Everything that’s wrong with Paraguay… is Horacio Cartes and his line of succession,” Piatti said. “[Paraguay needs] the opposition to take power. A real opposition to take power, and for all these criminals to be put in prison. That’s the dream of all Paraguayans.”
The bank’s collapse and its aftermath also raised questions about Paraguay’s image among foreign businesspeople. Eduardo López, a 35-year-old exporter whose company operates in Paraguay and the United States, said the collapse and its aftermath would only worsen the lack of confidence he had already seen among American business contacts. “We are a serious Paraguayan company, but [American businesspeople] don’t trust the Paraguayan government,” he said. “It’s a disaster.”
Lizza Lugo, a 22-year-old student leader at the National University, expressed frustration with the status quo and said she hoped voters would bring change in the 2028 presidential election. “The laws apply differently to those who have money and those who don’t. That is the reality in Paraguay,” she said. “I do hope people don’t have short memories, because they forget these things very quickly.”
The case remains at the pretrial stage: Peña is held at a military facility, Carvallo at a police facility, and eight Ueno executives have been arrested and charged. The state’s deposit guarantee fund is still working through customers who have not received advance payments, while protesters outside Congress have demanded accountability.