Over the years Ueno Bank seems to be the financial winner of Paraguay. Now the ghost of ‘Corralito’ has risen again

Ueno Bank has gone from Paraguay’s most ambitious financial dream to its worst nightmare. The story of such changes can be summarized in three figures. In record time (from 2023 to 2026) the entity increased its portfolio from 500,000 clients to more than 3 million, a staggering figure in a country of 6.5 million inhabitants. The problem is that this accelerated expansion was clouded on Tuesday, when the central bank intervened in the entity after verifying that it had not reached the minimum required solvency.

Now thousands of families across the country don’t have access to their accounts… and see how a curse word resonates: Playpen.

What happened? At the heart of Paraguay, which is experiencing a financial and political crisis, is Ueno Bank, an essential bank in the country’s economic structure. Since Tuesday, the entity has intervened by order of the central bank (BCP), meaning millions of clients have seen their savings frozen. The same thing happens to states with government funds amounting to millions.

The reason? Assets and liabilities are suspended while the BCP clarifies the bank’s situation and, most importantly, how well its liabilities are covered. Users themselves soon realized that they could not function normally at ATMs and online banking.

Is it serious? Not only does Ueno have more than three million clients in the country (“two out of every three Paraguayans choose Ueno Bank,” the company boasts on its website), it also maintains important business, political and institutional ties. This explains why the head of the banking regulator, Carlos Carvalho, resigned on Tuesday, or why the country’s president himself, Santiago Peña, resigned, even though Congress did not approve his departure and activated an impeachment trial against him.

In recent days, there have also been reports that the state has $850 million in bank deposits. Among the public funds it administers is about $355 million from the Social Security Institute (IPS), the agency in charge of managing Paraguay’s social security.

What is Ueno Bank? Over the years, a brilliant business success story. Paraguay has been the epicenter of a political and social earthquake since Tuesday. Although the entity was converted into a bank in 2023, when it received the BCP license to operate as such, its origins go back much further than the mid-70s. As a financial institution, its activities are focused on small merchants and a customer profile that finds it difficult to access traditional banking.

Over time, the firm acquired the interest of Grupo Vázquez, an important holding company in 2021. Two years later it joined the financial system and in 2024 it merged with the absorption of Visión Banco. It has since grown into a giant with more than three million clients in the country, handling three million transactions a day, according to its estimates.

These figures were reiterated this week, as was a review of Ueno’s links to key figures in Paraguay: Santiago Pena was a shareholder in Ueno Holdings, although he sold his shares in 2025; And before assuming the presidency of the BCP in 2023, Carlos Carvalho was himself a director of Financiera Ueno.

Why interfere? To understand this, we have to go back to Tuesday, when the BCP issued a statement announcing the “initiation of the Ueno Bank resolution procedure.” The note did not give details, but it mentioned a key rationale: the decision was taken “after verifying an inadequacy in its solvency index below the required minimum of 50%”. “The measure seeks to deal with their situation in an orderly manner, protecting depositors and safeguarding the stability of the financial system,” he added.

That same morning on Tuesday, the Ueno Bank app issued a message explaining that it could not display the balance. Just a few hours later, people determined to raise funds began gathering in front of the entity’s headquarters and dozens of branches. That’s how he says it the countryWho spoke to a hairdresser who insisted she needed money to buy medicine for her son.

BCP did not say anything else? yes To calm things down, Liana Caballero, a member of the BCP Board of Directors, clarified what happened: “We proceeded to close the entity, so neither the application nor the card nor any services of the entity are active until today.” He also recalled that the guarantee fund covers the equivalent of up to 75 minimum monthly salaries “per natural or legal person of every financial entity”. This equates to $37,700.

And now what? It is the great unknown. Beyond the political and institutional storm, Ueno Bank is home to thousands of households and concentrates $850 million in public deposits, including a few hundred from IPS. The financial institution also manages the pensions of hundreds of thousands of retirees. This relevance explains why in recent days there are citizens who have taken to the streets to protest the collapse of the entity, asking how the current situation came about and demanding solutions.

“Let’s be clear about what happened. A bank belonging to a single business conglomerate concentrated hundreds of millions of dollars in pension funds as well as the savings of most of the country’s adults,” commented Orkun Saka of City St George to the BBC. Although the BCP had already warned the companies linked to their owners about “excessive debt”, the expert recalled that “public funds are still coming in.” “This is not just a story of a badly run bank.”

For now, several directors of the entity and about thirty accused have been arrested. The focus is now on the management of financial projects, lending and its impact on bank solvency.

Picture | Ueno Bank

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