Paraguay Unions Urge Pension Exit From Bank

PARAGUAY · BANKING

Paraguayan unions want the state pension fund to leave ueno bank, a lender that sold US$350 million of bonds abroad. The president says he trusts the central bank.

Five Paraguayan unions and retiree groups demanded on Tuesday, 27 October, that the state pension fund leave ueno bank. They say the fund keeps more than US$300 million there, a figure that has not been independently confirmed.

The call matters to US readers because ueno sold US$350 million of bonds to international investors in March. President Santiago Peña said the same day that he trusts the central bank and asked for calm.

What the Groups Demand

The groups held a news conference in Asunción, the capital. They gave their demands in writing to the president of the Instituto de Previsión Social (IPS), the state social security fund.

The IPS president promised a written reply, and the groups said on Tuesday that none had arrived. The five are the association of IPS insured workers, the teachers’ union OTEP-SN, two labour groups and Grupo Insurgencia, an activist group.

They want the money moved into safer instruments, an emergency withdrawal protocol and a second-tier social bank for the IPS. They announced a campaign of mobilizations until the authorities respond.

They cite reports on ueno’s dealings with related companies, but the unions’ claims are not findings of wrongdoing. Bernabé Penayo of the labour group Acción Sindical Clasista said Peña is politically responsible for appointments at the IPS and central bank.

What Peña and the Central Bank Say

Peña said on Tuesday that the Banco Central del Paraguay (BCP), the regulator, is in charge and that calm is needed. He called the financial system very delicate and warned against information that could frighten savers.

He said banks earned over US$700 million in the first nine months of this year and that capital levels are strong. He added that the BCP has the legal powers it needs to supervise banks.

Local press noted that sector-wide profits do not by themselves answer questions about one bank. The BCP has an inquiry into whether ueno indirectly financed related companies.

The BCP said the inquiry was opened in September and could take at least four months. The bank said in a statement this month that it corrected the issue within the legal deadline.

Why Wall Street Is Watching This Bank

ueno sold US$350 million of five-year bonds, with a 6.70% coupon, to international investors under US rules in March. The bank says the deal, closed on 3 March, was the largest international bond issue by a Paraguayan bank.

On Friday, 16 October, Fitch Ratings, a credit rating agency, kept ueno at BB but cut its outlook to negative. Fitch cited fast balance-sheet growth and many intangible assets, which limit the bank’s capacity to absorb losses.

Fitch put ueno’s core capital ratio, after subtracting intangibles, at 10.3% at the end of June. It said the outlook could return to stable if that ratio is restored above 13%.

Fitch also called ueno’s asset quality sound, with 0.6% of loans overdue and provisions covering 345.2% of them in June. It noted greater market scrutiny this year of related-party deals and public-sector deposits.

What It Means for US Readers

US holders of ueno’s 2031 dollar bonds face price swings until the BCP inquiry and the pension decision are clear. The notes are senior unsecured, carry a 6.70% coupon and are governed by New York law, according to the bank.

Local press says the case tests Paraguay’s reputation abroad, as the central bank board crisis and the Senate’s sealed report have shown. Both give earlier background on the dispute.

More context is in the guides to who runs Paraguay’s economy and Paraguayan politics, and on the Paraguay hub. Travellers can see the Asunción city page.

What Is Not Known

It is not known how much the pension fund holds at ueno, because the US$300 million figure comes from the groups. Nor is it known whether the IPS will withdraw, or what the BCP inquiry will find.

Fitch’s own release was not opened, so its figures come from ueno’s statement and local press. Bond prices were not checked on a market screen, so this story gives none.

What Comes Next

The IPS president has promised the groups a written reply, and they plan mobilizations if the answer does not satisfy them. The BCP says its inquiry could last at least four months from September, which points to early 2027.

Frequently Asked Questions

Why do Paraguayan unions want pension money out of ueno bank?

Five groups cite reports on ueno’s loans to related companies and want the IPS to move the money into safer instruments. These are the groups’ claims, not findings of wrongdoing.

What is IPS?

The Instituto de Previsión Social is Paraguay’s state social security fund, which pays pensions and health care to insured workers. Its president promised the groups a written reply.

How much US debt does ueno bank have?

ueno sold US$350 million of five-year bonds due in 2031 to international investors in March. Fitch kept the bank at BB but changed its outlook to negative on 16 October.

Is ueno bank under investigation?

The central bank has an inquiry into whether ueno indirectly financed related companies, which may last months. The bank says it corrected the issue within the legal deadline.

What did President Peña say?

On 27 October Peña said he trusts the central bank and asked for calm and prudence. He said banks made more than US$700 million in profit in the first nine months of this year.

Sources: ueno bank, statement on the Fitch review, 19 October; ueno bank, statement on the US$350 million notes, 9 March; ueno bank, statement to the public, October; local press report on the Fitch rating action, 16 October; local press report on the unions’ demand, 27 October; second local report on the unions’ demand, 27 October; local press report on President Peña’s remarks, 27 October; second report on President Peña’s remarks, 27 October; local press report on the central bank inquiry, 9 October (all accessed 28 October 2026).