Bank balance sheets can appear complicated simply because of the terminology. At their core, however, they raise a straightforward question: How large is a bank’s financial buffer if some of its assets turn out to be worth less than the amount shown on the balance sheet?
In the case of Paraguay’s Ueno Bank, that question leads to an unusually large figure. At the end of 2025, the bank reported equity of around G. 2.118 trillion. Almost the same amount appeared as a single asset item: so-called “Derechos Fiduciarios,” or rights in a trust, valued at around G. 2.106 trillion. That represents just under ten percent of the bank’s total assets and almost all of its reported equity.
The item is not hidden. It appears explicitly in Ueno’s audited 2025 financial statements. What remains unclear is what exactly is included in it. That lack of detail is precisely what makes the item difficult to assess.
What is this trust asset?
Ueno took its current form in part through its 2024 merger with Visión Banco. As part of that merger, Paraguay’s central bank, the BCP, approved several special accounting arrangements.
One of them was the creation of a trust. Ueno describes the corresponding balance-sheet item in one place as costs arising from the reorganization of the business model after the merger. Elsewhere, it refers to investments and other items connected with that reorganization.
For non-specialists, the key point can be explained simply: Costs are normally recorded as expenses in the period in which they arise. This reduces profit and, ultimately, equity. Certain expenditures, however, can instead be recorded as assets and written down gradually over several years.
That is why it is crucial to know what is included in the G. 2.106 trillion figure. A technical installation, a realizable asset or another investment with economic value is fundamentally different from a restructuring or merger expense that has already been incurred but whose impact is merely being spread over several years.
Ueno’s published financial statements do not break down the amount in that way.
A second figure makes the comparison particularly interesting
Ueno itself reported equity of around G. 2.118 trillion at the end of 2025. Rating agency FIX SCR, in its report on Ueno Bank, also provides another figure: “adjusted capital” of only around G. 1.217 trillion.
The difference is around G. 901 billion.
This is notable because Ueno’s balance sheet at the same time shows almost exactly G. 901 billion under “Cargos Diferidos e Intangibles,” meaning deferred charges and intangible assets. This includes, among other things, around G. 761 billion for systems and software.
Mathematically, FIX’s adjusted-capital figure therefore corresponds almost exactly to Ueno’s reported equity minus this entire block of deferred and intangible assets.
| End of 2025 | Approximate amount |
|---|---|
| Equity reported by Ueno | G. 2.118 trillion |
| Deferred charges and intangible assets | G. 901 billion |
| Adjusted capital reported by FIX | G. 1.217 trillion |
| Trust asset “Derechos Fiduciarios” | G. 2.106 trillion |
This does not mean FIX considers Ueno’s balance sheet incorrect. The rating agency continues to assign the bank a high credit rating. The figure does show, however, that an assessment of capital strength can look very different once certain less tangible assets are not fully counted.
A stress test — not a claim about the actual value
What happens if, instead of starting from reported equity of G. 2.118 trillion, we start from adjusted capital of around G. 1.217 trillion?
At that point, the composition of the trust becomes decisive.
No one outside the bank and the supervisory authorities can determine from the published information whether this asset is worth 100 percent, 75 percent or only 50 percent of its book value. It would therefore be wrong to present any particular haircut as a fact.
It is possible, however, to calculate what different assumptions would imply.
| Assumed haircut on the trust asset | Remaining adjusted capital |
|---|---|
| 0 percent | around G. 1.217 trillion |
| 25 percent | around G. 690 billion |
| 50 percent | around G. 164 billion |
| around 57.8 percent | approximately zero |
| 75 percent | around negative G. 363 billion |
| 100 percent | around negative G. 889 billion |
The 57.8 percent figure is not an estimate of an actual loss. It is simply the mathematical point at which a corresponding decline in the value of the trust would completely absorb the adjusted capital calculated above.
Put another way: Once deferred and intangible assets are treated in the same way as they appear to be treated in the FIX figure, a loss of slightly more than half the value of the trust would be enough to exhaust the remaining buffer.
Whether such a haircut would be realistic, too high or even too low cannot be determined from the published information. To know that, one would need to know what the G. 2.106 trillion actually consists of.
A movement of G. 352 billion also remains unexplained
Another question arises from the change in the trust balance during 2025.
At the end of 2024, the amount stood at around G. 2.614 trillion. By the end of 2025, it had fallen to around G. 2.106 trillion. The balance-sheet value therefore declined by about G. 508.6 billion.
At the same time, Ueno reports around G. 156.7 billion in amortization of the trust asset for 2025.
The difference between these two figures is around G. 351.9 billion. The publicly available notes do not make it clear what caused this additional reduction.
There may be legitimate explanations, such as sales, transfers, repayments or other balance-sheet movements. The published documents, however, do not allow an outside observer to fully reconcile the change.
The special rules go beyond the trust
The trust structure is only one part of the special arrangements approved by the BCP in connection with the Ueno–Visión merger.
They also include the deferral of certain provisions on part of the acquired loan portfolio, the spreading of inherited losses over later periods and a special rule for assets taken over in settlement of defaulted loans.
For part of the loan-loss provisioning, a period of up to 20 years is provided. For certain assets inherited from Visión, provisioning does not begin until the fifth year after the merger.
These arrangements were approved by the BCP. They are therefore not hidden accounting entries or evidence that Ueno violated the rules.
They do mean, however, that the bank’s current balance sheet is not directly comparable with a situation in which all losses and charges had been recognized immediately.
The auditor confirms the accounts — within these rules
The audit by PricewaterhouseCoopers does not change that point. PwC confirmed Ueno’s financial statements under the applicable BCP rules, including the special instructions issued in connection with the merger.
An audit opinion therefore answers a different question from the stress test used here. The auditor examines whether the accounts were prepared correctly under the applicable accounting framework. It does not have to determine what the balance sheet would look like if the BCP had not approved the special transitional arrangements.
The position looked more robust by mid-2026
For a fair assessment, developments after the end of 2025 also matter. Ueno’s unaudited interim financial statements as of June 30, 2026 show an improvement in several indicators.
Reported equity rose to around G. 2.437 trillion. At the same time, deferred charges and intangible assets fell to around G. 825 billion. The trust asset also declined slightly to around G. 2.027 trillion.
If the same purely mechanical method used in the comparison with the 2025 FIX figure is applied, and the G. 825 billion is deducted from reported equity, around G. 1.611 trillion remains.
The hypothetical haircut on the trust that would completely absorb that amount would therefore no longer be around 57.8 percent, but approximately 79.5 percent by mid-2026.
This calculation does not come from FIX and is not an official capital measure. It merely shows that, under the same simplified method, the buffer had increased substantially compared with the end of 2025.
Ueno’s regulatory capital ratios also remained above the required minimums according to its interim statements. At the end of June, the bank reported a Tier 1 ratio of 12.06 percent and a total capital ratio of 14.52 percent.
Based on the published figures, there is therefore no evidence that Ueno is in breach of BCP capital requirements.
What would need to be disclosed to properly assess the balance sheet?
The key issue is not simply that Ueno was allowed to use special accounting arrangements. These were explicitly approved by the BCP. The problem for public analysis is that important information about their economic effect is missing.
Five questions would remove a significant part of the uncertainty:
- How is the roughly G. 2.1 trillion trust asset divided between costs, investments and other items?
- Which of those assets can be sold or otherwise realized economically?
- What explains the roughly G. 351.9 billion difference between the decline in the trust asset during 2025 and the reported amortization?
- How large would the still-unrecognized provisions on the Visión loan portfolio be without the approved deferral?
- How large would the provisions on assets taken over from loan defaults be if the special grace period did not apply?
ABC Color reported on the unusually large trust item and asked the BCP about it. The central bank referred to banking secrecy and said that it could not publicly discuss supervisory assessments concerning individual institutions or balance-sheet items.
Ueno, meanwhile, has responded to earlier questions about its high software values by arguing that a predominantly digital bank requires substantial investment in technology, cloud systems, cybersecurity, biometrics, payments infrastructure and other systems. An unusually high amount by itself does not prove overvaluation.
That argument is valid in principle. The size of the trust alone would also not prove that its book value is wrong.
But that is precisely why a detailed breakdown would matter.
The problem is not the answer, but the missing information
The publicly available figures do not support a serious conclusion that Ueno actually has negative equity or that the trust asset is overvalued. Such a conclusion would require more information than is currently disclosed.
What can be said is that an asset of more than G. 2 trillion, which is extraordinarily important to Ueno’s capital structure, is not sufficiently broken down for outside observers to assess it properly.
The scale is significant: At the end of 2025, the trust asset was almost equal to the bank’s entire reported equity and substantially larger than the adjusted capital reported by FIX.
The economic interpretation of Ueno’s balance sheet therefore depends to a considerable extent on a question that the published documents do not yet answer precisely: What exactly is contained in those G. 2.1 trillion, and what is the economic value of each component?