ASUNCIÓN, Paraguay — President Santiago Peña announced his resignation Thursday after the collapse of Ueno Bank, a major digital lender tied to his government, froze the savings of millions of people and set off street protests.1,3,5
The bank, which claimed more than 60% of Paraguay's adults as customers, was seized by the central bank Tuesday after regulators found its capital had fallen to less than half the legal minimum. The failure left depositors, retirees and workers unable to reach their money and cost Peña the backing of his long-ruling Colorado Party.1,3,5,6
Minutes after Peña said in a video posted to X that he was stepping down, the lower house voted to impeach him and send the charges to the Senate. NPR put the vote at 78-0; France 24 described it only as unanimous. Congressional leaders were expected to accept his resignation later Thursday, clearing the way for Vice President Pedro Alliana to be sworn in without waiting for a Senate trial.1,6
As lawmakers debated his removal, Peña said he was acting in the interest of "the stability of our country, social peace and the need to preserve our democratic institutions." He added, "I want to apologize to the people if I have failed them at any point," and said, "It was never my intention to betray the trust they placed in me." He also said his priority is "the peace of mind of Paraguayans who entrusted their savings to our financial system."1,6
The move against him followed a revolt inside his own party. Both of the Colorado Party's main factions in the lower house pledged to back impeachment, after party leader and former President Horacio Cartes withdrew his support and Congress President Basilio Nunez also withdrew support. Cartes said the party would not side with "the plundering of public and private funds and pensioners' money." Opposition senators were still demanding a trial, arguing that allowing Peña to resign would preserve his eligibility to become a senator for life, with legal protections that could prevent his prosecution.1,3,5
Peña, a 47-year-old former International Monetary Fund economist, had been welcomed in Washington weeks ago as an ally of the Trump administration. The United States Treasury sanctioned Cartes in 2023 over bribery allegations that the Trump administration lifted last year. Impeachment requires a two-thirds majority of lower house lawmakers present to send the case to the Senate, where another two-thirds vote would be needed to remove a president.1,3
Ueno grew from an obscure finance company to a household name in less than five years after winning its banking license in 2023. The lender, a rebranded version of a decades-old finance company, lured customers with cash-back offers on groceries, grew to more than 70 locations, sponsored Paraguay's national soccer team and put its name on the country's main stadium. Government money poured into its coffers under Peña, and as of last month it reported holding roughly $800 million in public deposits, about a quarter of its total, including money from the state pension and health fund and the operators of Paraguay's hydroelectric dams.1,3
Peña until last year held a stake in a company linked to Ueno. DW reported that he sold his shares in Ueno Holding in April 2025 and that lawmakers cited two loans he received from Ueno as part of allegations of improper financial gain. The impeachment articles, submitted by 35 opposition lawmakers and ruling-party dissidents in the 80-seat Chamber of Deputies, accused him of conflicts of interest, misuse of pension funds and institutional cover-ups, including improper interference in the Social Security Institute, known as IPS, and preferential treatment for Ueno. IPS held $355 million at the bank, about 9% of its investments, according to financial manager Gladys Vera. Lawmakers also questioned Peña's 2023 appointment of Carlos Carvallo, president of Financiera Ueno, the predecessor to Ueno Bank, to run the central bank, which approved the company's conversion into a bank just 83 days after his appointment, according to the motion.1,3,5
Warnings about insider lending had built for months. In June, central bank inspectors found a pattern of risky lending to companies tied to Ueno's owners, beyond what the law allows and without enough collateral, as reported by ABC Color, a Paraguayan newspaper. ABC News reported that on a single day in September 2025, nearly $39 million had gone to three such companies. Peña defended Ueno and the central bank's oversight as recently as last month, dismissing the concerns as a smear campaign. On Monday, regulators found poorly documented lending and expenses the bank had wrongly counted as assets. Once the books were corrected, the central bank said it took over Ueno because of a severe capital shortfall to "protect depositors and preserve the stability of the financial system."1,3,6
Ueno's app, cards and transfers went dark and its branches locked their doors. Long lines formed outside branches in Asuncion on Tuesday and Wednesday, and a rush to open accounts elsewhere crashed other banks' mobile apps. DW put Ueno's customers at about 2.94 million, roughly 60% of the adult population; France 24 said about three million depositors lost access. The guaraní fell nearly 4% against the U.S. dollar Thursday, bringing its losses this week to nearly 7%, according to central bank exchange-rate data. Officials appealed for calm and said they had begun repaying depositors, opening new accounts elsewhere for about 280,000 who had banked only with Ueno. Under a law passed Wednesday, a state guarantee fund must repay stranded depositors within five business days, starting Thursday with small accounts of up to about $1,600 held by customers with no debts to Ueno. The fund insures up to about $36,000 per customer, which the central bank says will cover the full balances of an estimated 97% of clients.1,3,5,6
Hundreds of retirees, depositors, university students and workers filled the streets of Asuncion, the capital, on Wednesday, and hundreds of employees of Ueno Bank and other companies in Grupo Vázquez, the bank's parent, protested outside the Labor Ministry on Thursday over jobs, severance and unpaid wages. Demonstrators shouted, "We want your head, Peña!" Their signs demanded impeachment, called him "the enemy of savers" and pleaded, "Give us back our money." Riot police fired pepper spray and rubber pellets to push back crowds. "Santiago Peña and the Colorado Party have stolen all our savings," said Luis Pineda, one of the protesters marching to Congress on Wednesday. "We are fed up with 70 years of plunder." Protester Belarmino Balbuena said, "This is yet another assault on honest, hard-working citizens, people whose small savings are the fruit of years of labor."1,3
Authorities detained senior Ueno executives, including founder Miguel Vázquez and bank President Juan Manuel Gustale, and prosecutors charged 27 bank officials and business associates with offenses including breach of trust and attempted fraud. Lawyers for several of those detained said they needed time to review the allegations before commenting. Peña approved emergency payouts Wednesday and named a new central bank chief, saying, "Paraguay needs institutions that provide answers and protect our people's resources." Pedro Acosta Bernal, appointed interim central bank president Wednesday after Carvallo resigned at Peña's request, said, "The banking system is sound."3
