Paraguay’s central bank put Ueno Bank into resolution on 2 November after a supervisory review pushed its solvency ratio below half the legal minimum. The review exposed a deeper failure at the digital lender. Transactions with companies linked to its controlling group had gone undisclosed when they should have been flagged, leaving the bank’s reported capital position looking stronger than it was.
The adjustment that triggered intervention
In September, Ueno reported a solvency ratio of 13.85%, above the 12% regulatory minimum. Supervisors subsequently reclassified loans after identifying links between borrowers and Grupo Vázquez, the bank’s majority owner. The resulting provisions for potential losses reduced regulatory capital. Once the recalculated ratio fell below 6%, the central bank had grounds under Paraguayan law to start resolution. Withdrawals worsened the bank’s liquidity strain, but the capital shortfall triggered the intervention.
What Ueno got wrong
Ratings agency FIX SCR said the review uncovered related-party transactions that Ueno had failed to disclose promptly, alongside weak assets and inadequate documentation. Reporting by Paraguay’s ABC Color, citing supervisory findings, traced about US$84.5 million in disbursements to two companies, Mowi and Grupo Hendy. Both had changed hands before receiving the loans, yet supervisors found that much of the money went towards covering overdrafts at other Grupo Vázquez companies. Asked in October about one of the loans, Ueno president Juan Gustale said he did not recognise the case and cited banking secrecy when declining to discuss individual transactions.
How neobanks can prevent a repeat
The Basel Committee’s standards call for banks to identify related parties, lend on arm’s-length terms, cap aggregate exposures and exclude anyone with a conflict of interest from credit decisions. For digital lenders, those checks belong in the loan approval process. Verify who ultimately controls the borrower and where the funds will go. Require prior board approval for material or high-risk related-party transactions, and reassess existing loans when ownership changes. Boards should also test how much capital would remain if several connected borrowers defaulted together, and whether the bank could meet rapid withdrawals while it raised fresh capital.
NewsHub Finance | NHX | 12 November 2026
Paraguay’s central bank put Ueno Bank into resolution on 2 November after a supervisory review pushed its solvency ratio below half the legal minimum. The review exposed a deeper failure at the digital lender. Transactions with companies linked to its controlling group had gone undisclosed when they should have been flagged, leaving the bank’s reported capital position looking stronger than it was.
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