ASUNCIÓN — Paraguayan President Santiago Peña resigned on Thursday following a political and financial crisis that led to the collapse of Ueno Bank, a major digital lender, leaving millions without access to their savings.
The central bank ordered Ueno Bank into resolution Monday over insolvency, freezing deposits for approximately 3 million customers—about 60 percent of Paraguay's adult population. The action left hundreds of thousands of families unable to access funds for food and essential expenses, sparking massive protests across the country.
Ueno Bank had expanded rapidly under Peña's administration from an obscure entity to one of Paraguay's largest banks. The bank attracted customers with generous cash-back offers on groceries and secured sponsorship of the national football team. It managed between $800 million and $850 million in deposits from state and pension entities, including retirement funds.
On Wednesday, the national football team's players issued a letter demanding government and judicial action regarding the crisis.
Bank executives were arrested as public outrage mounted. An impeachment motion filed by opposition lawmakers and members of Peña's own Colorado party held the president responsible for the banking system's collapse.
In a video message Thursday, Peña addressed the nation: "Dear compatriots, today I address you at one of the most difficult moments of my life. With my heart set on Paraguay and with the conviction that our republic must always come before any person or circumstance, I have decided to submit my resignation as president of the republic."
Peña, a 47-year-old economist, assumed office in August 2023 with a term scheduled through 2028. He had been a shareholder in the group that operated Ueno Bank until early 2024. Reports indicated he had ignored warnings from the central bank and media regarding the bank's operations in recent months.
Ueno Bank originated as a finance company in the 1970s. In 2021, Grupo Vázquez, a prominent Paraguayan business conglomerate, acquired it. The central bank authorized it to operate as a digital bank in late 2023.
Criticism centered on potential conflicts of interest given Peña's previous shareholding ties to Ueno Holding. Peña defended his involvement, saying he had made an "investment" as an economist and had divested all his shares. He dismissed local press reports alleging improper favoritism in directing state and pension funds to the bank as a "false media campaign."
Political pressure intensified Thursday when former President Horacio Cartes, once an ally of Peña, publicly endorsed the impeachment. Cartes posted a message stating, "We will not stand on the side of the theft of public, private and pensioners' funds."
