Paraguayan president Santiago Peña resigned on Thursday after the collapse of digital lender Ueno Bank triggered widespread protests, froze millions of dollars in deposits and cost him the backing of his ruling Colorado Party. Minutes after his announcement, the country’s lower house voted 78-0 to impeach him, sending the charges to the Senate.According to The Associated Press (AP), congressional leaders were expected to accept Peña’s resignation later on Thursday, potentially clearing the way for Vice President Pedro Alliana to take office without waiting for a Senate trial.Announcing his decision in a video posted on X, Peña said he was stepping down in the interest of “the stability of our country, social peace and the need to preserve our democratic institutions.”“I want to apologize to the people if I have failed them at any point,” he said. “It was never my intention to betray the trust they placed in me.”The resignation came after Peña lost the support of his political mentor, former President and Colorado Party leader Horacio Cartes, who backed impeachment proceedings.Cartes said the party would not side with “the plundering of public and private funds and pensioners’ money”. The US Treasury had sanctioned Cartes in 2023 over bribery allegations, which the Trump administration lifted last year.
Ueno Bank collapse: What triggered the political crisis?
Ueno Bank, which expanded rapidly from a relatively obscure financial company into one of Paraguay’s most prominent digital lenders, had more than three million customers, representing a significant share of the country’s 6.5 million population, according to company figures.The bank’s expansion came under scrutiny over alleged risky lending to companies linked to its controlling shareholder, Grupo Vázquez. Paraguay’s central bank reportedly identified loans to related companies that exceeded legal limits and lacked adequate collateral.The regulator intervened after finding poorly documented loans and expenses incorrectly counted as assets. Following corrections to its accounts, Ueno’s capital fell below half the legally required minimum, prompting the central bank to seize the lender and initiate resolution proceedings.The bank had reported holding approximately $800 million in public deposits, including funds belonging to state institutions, pension-related bodies and operators of the country’s hydroelectric dams.Peña had previously held a stake in a company linked to Grupo Vázquez but said he sold it in March 2025. He had also appointed Carlos Carvallo, former head of Financiera Ueno, the bank’s predecessor, as central bank chief. Carvallo resigned after the intervention.Meanwhile, prosecutors charged 27 bank officials and associates with breach of trust and attempted fraud. A judge ordered six executives, including founder Miguel Vázquez and bank president Juan Manuel Gustale, jailed pending trial.The collapse left customers unable to access savings through the bank’s application, cards and branches. Authorities have introduced a state-backed deposit guarantee mechanism to reimburse eligible customers, with payments beginning with smaller accounts.Protests continued after Peña’s resignation, with employees demanding unpaid wages and depositors seeking accountability. The Labour Ministry estimated that around 7,000 direct and indirect jobs were affected.Under Paraguay’s Constitution, former presidents become senators for life and receive parliamentary immunity unless removed through impeachment. The proceedings against Peña could therefore have significant implications beyond his departure from office.
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