Paraguay’s central bank has put ueno bank into resolution, the country’s largest bank failure in years, after finding that the lender’s solvency ratio had fallen below 50 percent of the minimum required. The board of the Banco Central del Paraguay (BCP) voted unanimously on November 2 to open the resolution procedure, the bank said in a statement published on Tuesday, after adjustments made to ueno’s financial statements during a regularization process cut its solvency below half the legal floor. The procedure runs under Law 2334/03, the deposit guarantee and bank resolution law, and the Superintendency of Banks will appoint interventors to verify the bank’s net worth at the resolution date, preserve its assets and run an orderly process. The BCP said the case is specific to ueno and does not reflect a generalized condition in Paraguay’s financial system.
The resolution closed the bank in practice. “We proceeded to the closure of the entity, so neither the app, nor the cards, nor any service of the entity is active from this date,” board member Liana Caballero told the central bank’s press conference on Tuesday morning, as reported by EFE. Deposits are guaranteed up to 75 monthly minimum salaries per depositor per entity, which the BCP put at 228,300,000 guaranies, about 38,000 dollars. In a second statement on Tuesday the BCP said depositors will receive a first payment of up to 10,000,000 guaranies from the Deposit Guarantee Fund shortly, with any remainder paid under a calendar still to be issued, and with debts owed to ueno deducted before payment.
The exposure runs well beyond retail savers. Ueno has said it has about 3 million customers, a figure Paraguayan reporting puts at roughly 60 percent of the adult population, and it manages large volumes of public money. The state pension institute, the Instituto de Previsión Social (IPS), had about 355 million dollars invested in ueno according to its financial manager Gladys Vera as reported by EFE, with Paraguayan outlets reporting about 380 million dollars, and about 32,000 pensioners were paid through the bank. Opposition senators said IPS resources at risk exceed 328 million dollars. The BCP said it will use the mechanisms in the law to seek the greatest possible protection for balances above the guarantee limit.
The political fallout reached the top of the central bank within a day. President Santiago Peña said publicly that he had asked for the resignation of BCP president Carlos Carvallo, and Carvallo told the press conference that his resignation was already signed, saying the bank needed calm to do its work. MarketData reported that Carvallo then formally submitted the resignation to Congress, where Senate president Basilio Núñez confirmed receiving it, and Ratio reported that board member Carmen Marín also resigned and that Caballero Krause has taken over the presidency temporarily while the executive names a permanent replacement. Carvallo, who became BCP president in August 2023, had previously run Financiera Ueno, the lender’s predecessor, from 2021 to 2023. The Paraguayan Industrial Union demanded a renewal of the central bank’s leadership and an investigation into possible negligence or omissions, and opposition senators announced they will promote an impeachment trial against Peña and Vice President Pedro Alliana and file a criminal complaint against the BCP board, EFE reported. The BCP itself filed a complaint with prosecutors, the economic crimes unit opened a case, and La Nación reported, via CriptoNoticias, that capture was ordered for eight ueno directors.
The failure lands on ground this site has covered since October, when a central bank report to the Senate on ueno’s loans to related companies fuelled resignation calls against Carvallo and a public fight over supervision. What was then a governance dispute is now a solvency event with a payout calendar to set, interventors to appoint and a pension fund’s recovery to determine, and the BCP’s handling of the next two weeks will decide whether depositors and markets accept its assurance that this was one bank, not the system.