<PAGE>

  As filed with the Securities and Exchange Commission on September 28, 2004
================================================================================
                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549

                               -----------------

                                   FORM 20-F

                               -----------------

        [_] REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF
                      THE SECURITIES EXCHANGE ACT OF 1934

                                      OR

             [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                      THE SECURITIES EXCHANGE ACT OF 1934
                   For the fiscal year ended March 31, 2004

                                      OR

           [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                      THE SECURITIES EXCHANGE ACT OF 1934
                 For the transition period         to

                       Commission file number 333-11072

                               -----------------

                    KABUSHIKI KAISHA TOKYO MITSUBISHI GINKO
            (Exact name of Registrant as specified in its charter)

                      THE BANK OF TOKYO-MITSUBISHI, LTD.
                (Translation of Registrant's name into English)

                                     Japan
                (Jurisdiction of incorporation or organization)

                            7-1, Marunouchi 2-chome
                          Chiyoda-ku, Tokyo 100-8388
                                     Japan
                   (Address of principal executive offices)

   Securities registered or to be registered pursuant to Section 12(b) of the
Act: None.

   Securities registered or to be registered pursuant to Section 12(g) of the
Act: None.

   Securities for which there is a reporting obligation pursuant to Section
15(d) of the Act:

   $2,000,000,000 8.40% Global Senior Subordinated Notes due April 15, 2010.

   Indicate the number of outstanding shares of each of the issuer's classes of
capital or common stock as of the close of the period covered by the annual
report:

   At March 31, 2004, (1) 5,019,469,546 shares of common stock and (2)
81,400,000 shares of preferred stock were issued.

   Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such short period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days:

                                Yes [X]  No [_]

   Indicate by check mark which financial statement item the registrant has
elected to follow:

                           Item 17 [_]  Item 18 [X]

================================================================================

<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                       Page
                                                                                       ----
<C>       <S>                                                                          <C>
Forward-Looking Statements............................................................   3
Item 1.   Identity of Directors, Senior Management and Advisors.......................   4
Item 2.   Offer Statistics and Expected Timetable.....................................   4
Item 3.   Key Information.............................................................   4
Item 4.   Information on the Company..................................................  18
Item 5.   Operating and Financial Review and Prospects................................  39
Item 6.   Directors, Senior Management and Employees..................................  92
Item 7.   Major Shareholders and Related Party Transactions........................... 101
Item 8.   Financial Information....................................................... 102
Item 9.   The Offer and Listing....................................................... 102
Item 10.  Additional Information...................................................... 103
Item 11.  Quantitative and Qualitative Disclosures about Credit, Market and Other Risk 113
Item 12.  Description of Securities Other Than Equity Securities...................... 122
Item 13.  Defaults, Dividend Arrearages and Delinquencies............................. 123
Item 14.  Material Modifications of the Rights of Security Holders and Use of Proceeds 123
Item 15.  Controls and Procedures..................................................... 123
Item 16A. Audit Committee Financial Expert............................................ 123
Item 16B. Code of Ethics.............................................................. 123
Item 16C. Principal Accountant Fees and Services...................................... 124
Item 17.  Financial Statements........................................................ 126
Item 18.  Financial Statements........................................................ 126
Item 19.  Exhibits.................................................................... 126
Selected Statistical Data............................................................. A-1
Consolidated Financial Statements..................................................... F-1
</TABLE>

For purposes of this Annual Report, we have presented our consolidated
financial statements in accordance with accounting principles generally
accepted in the United States of America, or US GAAP, except for the
risk-adjusted capital ratios, the business segment financial information and
some other specifically identified information, which are prepared in
accordance with accounting principles generally accepted in Japan, or Japanese
GAAP. Unless otherwise stated or the context otherwise requires, all amounts in
our financial statements are expressed in Japanese yen.

When we refer in this Annual Report to "we," "us" and "our," we mean The Bank
of Tokyo-Mitsubishi, Ltd. and its consolidated subsidiaries. References in this
Annual Report to "yen" or "(Yen)" are to Japanese yen and references to "US
dollars," "US dollar," "dollars," "US$" or "$" are to United States dollars.
Our fiscal year ends on March 31 of each year. From time to time, we may refer
to the fiscal year ended March 31, 2004 throughout this Annual Report as fiscal
2003 or the 2003 fiscal year. We may also refer to other fiscal years in a
corresponding manner. References to years not specified as being fiscal years
are to calendar years.

We usually hold the ordinary general meeting of shareholders in June of each
year in Chiyoda-ku, Tokyo.

                                      2

<PAGE>

                          Forward-Looking Statements

We may from time to time make written or oral forward-looking statements.
Written forward-looking statements may appear in documents filed with the U.S.
Securities and Exchange Commission, or SEC, including this Annual Report, and
other reports to shareholders and other communications.

The U.S. Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward-looking information to encourage companies to provide
prospective information about themselves. We rely on this safe harbor in making
forward-looking statements.

Forward-looking statements appear in a number of places in this Annual Report
and include statements regarding our intent, business plan, targets, belief or
current expectations and/or the current belief or current expectations of our
management with respect to our results of operations and financial condition,
including, among other matters, our problem loans and loan losses. In many, but
not all cases, we use words such as "anticipate," "aim," "believe," "estimate,"
"expect," "intend," "plan," "probability," "risk" and similar expressions, as
they relate to us or our management, to identify forward-looking statements.
These statements reflect our current views with respect to future events and
are subject to risks, uncertainties and assumptions. Should one or more of
these risks or uncertainties materialize or should underlying assumptions prove
incorrect, actual results may vary materially from those which are anticipated,
believed, estimated, expected, intended or planned.

Our forward-looking statements are not guarantees of future performance and
involve risks and uncertainties. Actual results may differ from those in the
forward-looking statements as a result of various factors. We identify in this
Annual Report in "Item 3.D. Key Information--Risk Factors," "Item 4.B.
Information on the Company--Business Overview," "Item 5. Operating and
Financial Review and Prospects" and elsewhere, some, but not necessarily all,
of the important factors that could cause these differences.

We do not intend to update our forward-looking statements. We are under no
obligation, and disclaim any obligation, to update or alter our forward-looking
statements, whether as a result of new information, future events or otherwise.

                                      3

<PAGE>

                                    PART I

Item 1. Identity of Directors, Senior Management and Advisors.

Not applicable.

Item 2. Offer Statistics and Expected Timetable.

Not applicable.

Item 3. Key Information.

A. Selected Financial Data

Selected statement of operations data and selected balance sheet data set forth
below have been derived from our audited consolidated financial statements.
Nippon Trust Bank Limited, our former subsidiary, has been deconsolidated
effective April 2, 2001, when we, The Mitsubishi Trust and Banking Corporation
and Nippon Trust Bank jointly established a bank holding company.

Except for risk-adjusted capital ratios, which are calculated in accordance
with Japanese banking regulations based on information derived from our
financial statements prepared in accordance with Japanese GAAP, and the average
balance information, the selected financial data set forth below are derived
from our financial statements prepared in accordance with US GAAP. In the
fiscal year ended March 31, 2004, certain operations including domestic
mortgage securities business were discontinued and related figures in prior
fiscal years were reclassified to discontinued operations to conform to the
presentation for the fiscal year ended March 31, 2004.

You should read the selected financial data set forth below in conjunction with
"Item 5. Operating and Financial Review and Prospects" and our consolidated
financial statements and other financial data included elsewhere in this Annual
Report. These data are qualified in their entirety by reference to all of that
information.

                                      4

<PAGE>

<TABLE>
<CAPTION>
                                                                     Fiscal years ended March 31,
                                          ----------------------------------------------------------------------------------
                                               2000            2001            2002              2003              2004
                                          --------------  --------------  --------------  --------------      --------------
                                                       (in millions, except per share data and number of shares)
<S>                                       <C>             <C>             <C>             <C>                 <C>
Statement of operations data:
   Interest income....................... (Yen)1,781,618  (Yen)1,892,163  (Yen)1,668,051  (Yen)1,260,667      (Yen)1,120,152
   Interest expense......................        898,669       1,098,891         782,316         435,083             338,896
                                          --------------  --------------  --------------  --------------      --------------
   Net interest income...................        882,949         793,272         885,735         825,584             781,256
   Provision (credit) for credit losses..        351,914         652,728         466,947         287,282            (142,362)
                                          --------------  --------------  --------------  --------------      --------------
   Net interest income after provision
    (credit) for credit losses...........        531,035         140,544         418,788         538,302             923,618
   Non-interest income...................        520,544         615,289         313,051         724,610             983,119
   Non-interest expense..................        907,761         846,630         948,169         973,337           1,034,939
                                          --------------  --------------  --------------  --------------      --------------
   Income (loss) from continuing
    operations before income tax
    expense (benefit) and cumulative
    effect of a change in accounting
    principle............................        143,818         (90,797)       (216,330)        289,575             871,798
   Income tax expense (benefit)..........        105,470         (10,197)        (76,557)         50,435             333,612
                                          --------------  --------------  --------------  --------------      --------------
   Income (loss) from continuing
    operations before cumulative effect
    of a change in accounting principle..         38,348         (80,600)       (139,773)        239,140             538,186
   Income (loss) from discontinued
    operations--net......................         (2,873)        (27,084)          1,235          10,370                (585)
   Cumulative effect of a change in
    accounting principle, net of
    tax/(1)/.............................             --              --           5,867            (532)                 --
                                          --------------  --------------  --------------  --------------      --------------
   Net income (loss)..................... (Yen)   35,475  (Yen) (107,684) (Yen) (132,671) (Yen)  248,978      (Yen)  537,601
                                          ==============  ==============  ==============  ==============      ==============
   Net income (loss) available to a
    common shareholder................... (Yen)   30,826  (Yen) (114,400) (Yen) (139,387) (Yen)  245,620      (Yen)  527,528
                                          ==============  ==============  ==============  ==============      ==============
Amounts per share:
   Basic earnings (loss) per common
    share--income (loss) from
    continuing operations available to
    a common shareholder before
    cumulative effect of a change in
    accounting principle................. (Yen)     7.21  (Yen)   (18.68) (Yen)   (31.33) (Yen)    50.39      (Yen)   105.22
   Basic earnings (loss) per common
    share--net income (loss) available
    to a common shareholder..............           6.59          (24.47)         (29.82)          52.49              105.10
   Diluted earnings (loss) per common
    share--income (loss) from
    continuing operations available to
    a common shareholder before
    cumulative effect of a change in
    accounting principle.................           4.33          (18.68)         (31.33)          47.05              104.93
   Diluted earnings (loss) per common
    share--net income (loss) available
    to a common shareholder..............           3.73          (24.47)         (29.82)          49.11              104.81
   Number of shares used to calculate
    basic earnings per common share (in
    thousands)...........................      4,675,442       4,675,251       4,675,454       4,679,226           5,019,470
   Number of shares used to calculate
    diluted earnings per common share
    (in thousands).......................      4,822,435       4,675,251       4,675,454       4,777,359/(2)/      5,019,470
   Cash dividends per share declared
    during the fiscal year/(3)/:
     --Common shares..................... (Yen)     8.50  (Yen)     8.50  (Yen)    14.96  (Yen)     3.00      (Yen)     7.73
                                              $     0.08      $     0.08      $     0.14      $     0.03          $     0.07
     --Preferred shares.................. (Yen)    57.12  (Yen)    82.50  (Yen)    82.50  (Yen)    41.25      (Yen)   123.75
                                              $     0.55      $     0.79      $     0.79      $     0.40          $     1.19
</TABLE>

<TABLE>
<CAPTION>
                                                                           At March 31,
                                          -------------------------------------------------------------------------------
                                               2000            2001            2002            2003            2004
                                          --------------- --------------- --------------- --------------- ---------------
                                                                           (in millions)
<S>                                       <C>             <C>             <C>             <C>             <C>
Balance sheet data:
   Total assets.......................... (Yen)68,817,234 (Yen)76,376,903 (Yen)76,631,154 (Yen)77,680,387 (Yen)85,058,552
   Loans, net of allowance for credit
    losses...............................      39,830,324      38,790,145      39,670,553      38,933,744      39,281,696
   Total liabilities.....................      65,623,074      73,966,787      74,724,150      75,744,644      82,286,419
   Deposits..............................      45,159,956      49,139,024      51,828,564      55,267,377      58,538,994
   Long-term debt........................       3,973,690       4,431,173       4,893,142       4,607,359       5,086,993
   Shareholder's equity..................       3,194,160       2,410,116       1,907,004       1,935,743       2,772,133
   Common stock..........................         663,870         663,870         663,870         749,873         749,873
</TABLE>

                                      5

<PAGE>

<TABLE>
<CAPTION>
                                                                             Fiscal years ended March 31,
                                           -------------------------------------------------------------------------------
                                                 2000                2001                  2002                2003
                                           ----------------  ----------------      ----------------      ----------------
                                                                           (in millions, except percentages)
<S>                                        <C>               <C>                   <C>                   <C>
Other financial data:

Average balances:                             (unaudited)         (unaudited)           (unaudited)         (unaudited)
   Interest-earning assets................ (Yen) 66,924,906  (Yen) 67,452,987      (Yen) 67,828,341      (Yen) 68,330,118
   Interest-bearing liabilities...........       58,962,733        60,522,935            62,163,161            62,386,979
   Total assets...........................       70,264,631        73,163,060            74,462,895            76,642,166
   Shareholder's equity...................        2,788,875         2,631,170             2,250,176             1,765,204

Return on equity and assets:                  (unaudited)         (unaudited)           (unaudited)         (unaudited)
   Net income (loss) available to a
    common shareholder as a percentage
    of total average assets...............             0.04%            (0.16)%               (0.19)%                0.32%
   Net income (loss) available to a
    common shareholder as a percentage
    of average shareholder's equity.......             1.11%            (4.35)%               (6.19)%               13.91%
   Dividends per common share as a
    percentage of basic earnings per
    common share..........................           128.98%              -- /(4)/              -- /(4)/             5.72%
   Average shareholder's equity as a
    percentage of total average assets....             3.97%             3.60%                 3.02%                 2.30%
   Net interest income as a percentage
    of total average interest-earning
    assets................................             1.32%             1.18%                 1.31%                 1.21%
Credit quality data:

   Allowance for credit losses............ (Yen)  1,137,181  (Yen)  1,385,010      (Yen)  1,341,608      (Yen)  1,058,633
   Allowance for credit losses as a
    percentage of loans...................             2.78%             3.45%                 3.27%                 2.65%
   Nonaccrual and restructured loans,
    and accruing loans contractually
    past due 90 days or more.............. (Yen)  1,922,645  (Yen)  3,446,143      (Yen)  3,244,281      (Yen)  2,115,654
   Nonaccrual and restructured loans,
    and accruing loans contractually
    past due 90 days or more as a
    percentage of loans...................             4.69%             8.58%                 7.91%                 5.29%
   Allowance for credit losses as a
    percentage of nonaccrual and
    restructured loans, and accruing
    loans contractually past due 90
    days or more..........................            59.15%            40.19%                41.35%                50.04%
   Net loan charge-offs................... (Yen)    506,879  (Yen)    445,267      (Yen)    465,180      (Yen)    573,474

                                              (unaudited)         (unaudited)           (unaudited)         (unaudited)
   Net loan charge-offs as a percentage
    of average loans......................             1.17%             1.10%                 1.18%                 1.41%
   Average interest rate spread...........             1.14%             1.00%                 1.20%                 1.15%
   Risk-adjusted capital ratio
    calculated under Japanese GAAP/(5)/:..            11.46%             9.69%                10.29%                10.43%
</TABLE>
<TABLE>
<CAPTION>

                                           -----------------
                                                 2004
                                           ----------------

<S>                                        <C>
Other financial data:

Average balances:                             (unaudited)
   Interest-earning assets................ (Yen) 72,591,384
   Interest-bearing liabilities...........       67,141,293
   Total assets...........................       83,474,334
   Shareholder's equity...................        2,398,816

Return on equity and assets:                  (unaudited)
   Net income (loss) available to a
    common shareholder as a percentage
    of total average assets...............             0.63%
   Net income (loss) available to a
    common shareholder as a percentage
    of average shareholder's equity.......            21.99%
   Dividends per common share as a
    percentage of basic earnings per
    common share..........................             7.35%
   Average shareholder's equity as a
    percentage of total average assets....             2.87%
   Net interest income as a percentage
    of total average interest-earning
    assets................................             1.08%
Credit quality data:

   Allowance for credit losses............ (Yen)    649,346
   Allowance for credit losses as a
    percentage of loans...................             1.63%
   Nonaccrual and restructured loans,
    and accruing loans contractually
    past due 90 days or more.............. (Yen)  1,229,247
   Nonaccrual and restructured loans,
    and accruing loans contractually
    past due 90 days or more as a
    percentage of loans...................             3.08%
   Allowance for credit losses as a
    percentage of nonaccrual and
    restructured loans, and accruing
    loans contractually past due 90
    days or more..........................            52.82%
   Net loan charge-offs................... (Yen)    247,677

                                              (unaudited)
   Net loan charge-offs as a percentage
    of average loans......................             0.61%
   Average interest rate spread...........             1.04%
   Risk-adjusted capital ratio
    calculated under Japanese GAAP/(5)/:..            11.97%
</TABLE>
--------
(1) Effective April 1, 2001, we adopted Statement of Financial Accounting
    Standards ("SFAS") No. 133, "Accounting for Derivative Instruments and
    Hedging Activities," as amended by SFAS No. 137 and SFAS No. 138. On April
    1, 2002, we also adopted SFAS No. 142, "Goodwill and Other Intangible
    Assets."
(2) Includes the common shares potentially issuable pursuant to the 3%
    exchangeable guaranteed notes due 2002. The 3% exchangeable guaranteed
    notes due 2002 were redeemed in November 2002.
(3) For the convenience of readers, the US dollar amounts are presented as
    translations of Japanese yen amounts at the rate of (Yen)104.18 = US$1.00,
    the noon buying rate on March 31, 2004 in New York City for cable transfers
    in Japanese yen as certified for customs purposes by the Federal Reserve
    Bank of New York.
(4) Percentages against basic loss per common share have not been presented
    because such information is not meaningful.
(5) Risk-adjusted capital ratios have been calculated in accordance with
    Japanese banking regulations, based on information derived from our
    consolidated financial statements prepared in accordance with Japanese GAAP.

                                      6

<PAGE>

Exchange Rate Information

The tables below set forth, for each period indicated, the noon buying rate in
New York City for cable transfers in Japanese yen as certified for customs
purposes by the Federal Reserve Bank of New York, expressed in Japanese yen per
$1.00. On September 21, 2004, the noon buying rate was $1.00 equals (Yen)109.94
and the inverse noon buying rate was (Yen)100 equals $0.91.

<TABLE>
<CAPTION>
                                           Year 2004
     -------------------------------------------------------------------------------------
        March       April        May        June        July       August    September/(1)/
     ----------- ----------- ----------- ----------- ----------- ----------- -------------
<S>  <C>         <C>         <C>         <C>         <C>         <C>         <C>
High (Yen)112.12 (Yen)110.37 (Yen)114.30 (Yen)111.27 (Yen)111.88 (Yen)111.53  (Yen)110.47
Low.      104.18      103.70      108.50      107.10      108.21      109.00       109.22
</TABLE>
--------
(1) Period from September 1 to September 21.

<TABLE>
<CAPTION>
                                             Fiscal year ended March 31,
                             -----------------------------------------------------------
                                2000        2001        2002        2003        2004
                             ----------- ----------- ----------- ----------- -----------
<S>                          <C>         <C>         <C>         <C>         <C>
Average (of month-end rates) (Yen)110.02 (Yen)111.64 (Yen)125.64 (Yen)121.10 (Yen)112.75
</TABLE>

B. Capitalization and Indebtedness

Not applicable.

C. Reasons for the Offer and Use of Proceeds

Not applicable.

D. Risk Factors

Investing in our securities involves a high degree of risk. You should
carefully consider the risks described below as well as all the other
information in this Annual Report, including our consolidated financial
statements and related notes, "Item 5. Operating and Financial Review and
Prospects," "Item 11. Quantitative and Qualitative Disclosures about Credit,
Market and Other Risk" and "Selected Statistical Data."

Our business, operating results and financial condition could be materially
adversely affected by any of the factors discussed below. The trading price of
our securities could decline due to any of these factors. This Annual Report
also contains forward-looking statements that involve risks and uncertainties.
Our actual results could differ materially from those anticipated in these
forward-looking statements as a result of various factors, including the risks
faced by us described below and elsewhere in this Annual Report. See
"Forward-Looking Statements."

Risks Related to Our Business

We may suffer additional losses in the future due to problem loans.

We have suffered from worsening asset quality problems since the early 1990s.
Despite recent progress in reducing the level of our problem loans, we continue
to have a considerable amount of problem loans on our balance sheet. A number
of our borrowers are still facing challenging circumstances, and our problem
loans and credit-related expenses could increase if:

..   economic conditions in Japan do not improve;

..   real estate prices in Japan continue to decline or stock prices in Japan
    decline;

..   the rate of corporate bankruptcies in Japan or elsewhere in the world rises;

..   our large borrowers become insolvent or must be restructured;

..   current restructuring plans are not successfully implemented;

                                      7

<PAGE>

..   additional economic problems arise elsewhere in the world; or

..   the global economic environment deteriorates generally.

An increase in problem loans and credit-related expenses would adversely affect
our results of operations, weaken our financial condition and erode our capital
base. Our credit losses may increase if we elect, or are forced by economic or
other considerations, to sell or write-off our problem loans at a larger
discount, in a larger amount and/or in a different time or manner than we may
otherwise want. For a discussion of our historical problem loans, see "Item
5.B. Operating and Financial Review and Prospects--Liquidity and Capital
Resources--Financial Condition--Allowance for Credit Losses, Nonperforming and
Past Due Loans" and "Selected Statistical Data--Loan Portfolio."

Our allowance for credit losses may be insufficient to cover future loan losses.

Our allowance for credit losses in our loan portfolio is based on assumptions
and estimates about our customers, the value of collateral we hold and the
economy as a whole. Our actual loan losses could prove to be materially
different from our estimates and could materially exceed our allowance. If our
actual loan losses are higher than we currently expect, our current allowance
for credit losses will be insufficient. If general economic conditions
deteriorate or the standards for establishing allowances change, causing us to
change some of our assumptions and estimates, if the value of collateral we
hold declines or if we are adversely affected by other factors to an extent
that is worse than anticipated, we may have to provide for additional allowance
for credit losses. For a detailed discussion of our allowance policy and the
historical trend of allowances for credit losses, see "Item 5.A. Operating and
Financial Review and Prospects--Operating Results--Critical Accounting
Estimates--Allowance for Credit Losses" and "Item 5.B. Operating and Financial
Review and Prospects--Liquidity and Capital Resources--Financial
Condition--Allowance for Credit Losses, Nonperforming and Past Due Loans."

The credit quality of our loan portfolio may be adversely affected by the
continuing financial difficulties facing companies operating in the Japanese
real estate, construction, wholesale and retail, and automotive sectors.

We have large exposure to borrowers in the Japanese real estate, construction,
wholesale and retail, and automotive sectors, and are thus exposed to the
ongoing financial difficulties faced by some borrowers operating in those
sectors. Some of the companies to which we have extended credit in these
sectors are exposed to ongoing financial difficulties and they may be in
restructuring negotiations or considering whether to seek bankruptcy
protection. If these companies are unsuccessful in their restructuring efforts
due to continuing financial difficulties and other unexpected factors, are
otherwise forced to seek bankruptcy protection, or if other lenders discontinue
or decrease their financial support to these companies for any reason, there
may be further significant deteriorations in the credit quality of our loan
portfolio, which would expose us to further loan losses. For a detailed
discussion of our exposure to these sectors, see "Item 5.B. Operating and
Financial Review and Prospects--Liquidity and Capital Resources--Financial
Condition--Allowance for Credit Losses, Nonperforming and Past Due Loans" and
"Selected Statistical Data--Loan Portfolio."

Our exposure to troubled borrowers may increase, and our recoveries from them
may be lower than expected.

We may provide additional loans or equity capital to troubled borrowers in
order to facilitate their restructuring and revitalization efforts. We may
forbear from exercising some or all of our rights as a creditor against them,
and we may forgive loans to them in conjunction with their debt restructuring.
We may take these steps even when our legal rights might permit us to take
stronger action against the borrower and even when others might take stronger
action against the borrower to maximize recovery or to reduce exposure in the
short term. We may provide support to troubled borrowers for various reasons,
including any of the following reasons arising from Japan's business
environment and customs:

..   political or regulatory considerations;

                                      8

<PAGE>

..   reluctance to push a major client into default or bankruptcy or to disrupt
    a restructuring plan supported by other lenders; and

..   a perceived responsibility for the obligations of our affiliated and
    associated companies, as well as companies with which we have historical
    links or other long-standing relationships.

These practices may substantially increase our exposure to troubled borrowers
and increase our losses.

We may experience losses because our remedies for credit defaults by our
borrowers are limited.

We may not be able to realize the value of the collateral held by us or enforce
our rights against defaulting customers because of:

..   the difficulty of foreclosing on collateral in Japan;

..   the illiquidity of and depressed values in the Japanese real estate market;
    and

..   the depressed values of pledged securities held as collateral.

Efforts by other Japanese banks to meet the Japanese government's guidance to
dispose of problem loans by March 31, 2005, or to otherwise address their
nonperforming loans, could exacerbate our credit losses.

Japan's Financial Services Agency, or the Financial Services Agency, announced
in October 2002 that it would strive to reduce by about half the aggregate
ratio of nonperforming credits to total credits of major Japanese banks by
March 31, 2005. Although we have achieved this target during the fiscal year
ended March 31, 2004, continuing efforts by other Japanese banks to restructure
problem borrowers within the specified time frame could increase our credit
losses. If we are a minority lender to borrowers engaged in restructuring
negotiations with such borrowers' "main bank," as part of the restructuring, we
may have to sell or write-off our problem loans at a larger discount, in a
larger amount and/or in a different time or manner than we would have
otherwise. We may also elect to dispose of problem loans for lower values or in
a less than optimal manner as a result of these restructuring efforts.
Alternatively, troubled banks and other financial institutions may discontinue
or decrease their credit support to troubled borrowers to whom we are a
co-lender, resulting in significant failures of those borrowers and/or a
deterioration in the quality of our loan portfolio.

Our business may be adversely affected by negative developments with respect to
other Japanese financial institutions, both directly and through the effect
they may have on the overall Japanese banking environment and on their
borrowers.

Many Japanese financial institutions, including banks, non-bank lending and
credit institutions, affiliates of securities companies and insurance
companies, are still experiencing declining asset quality and capital adequacy
and other financial problems. This may lead to severe liquidity and solvency
problems, which have in the past resulted in the liquidation, government
control or restructuring of affected institutions. The continued financial
difficulties of other financial institutions could adversely affect us because:

..   we have extended loans to banks and other financial institutions that are
    not our consolidated subsidiaries, some of which are classified as
    nonaccrual and restructured loans;

..   we are a shareholder of some other banks and financial institutions that
    are not our consolidated subsidiaries;

..   we may be requested to participate in providing assistance to support
    distressed financial institutions that are not our consolidated
    subsidiaries;

..   financial institutions may become majority owned and/or controlled by the
    Japanese government as a result of the government's conversion of their
    preferred shares into common stock and/or injection of additional

                                      9

<PAGE>

  public funds into financial institutions pursuant to the Deposit Insurance
   Law, such as the injection of public funds into Resona Bank, Ltd. and
   Ashikaga Bank, Ltd. in 2003, or other newly introduced frameworks for the
   injection of public funds into financial institutions;

..   if the government takes control of major financial institutions, we will
    become a direct competitor of government-controlled financial institutions
    and may be put at a competitive disadvantage if the Japanese government
    provides regulatory, tax, funding or other benefits to those financial
    institutions to strengthen their capital, facilitate their sale or
    otherwise;

..   deposit insurance premiums could rise if deposit insurance funds prove to
    be inadequate; and

..   repeated or large-scale bankruptcies and/or government support or control
    of financial institutions could generally undermine depositor confidence or
    adversely affect the overall banking environment.

The proposed management integration with UFJ Bank Limited and its subsidiaries
may be delayed, materially altered or abandoned. In addition, we may have
difficulty integrating the operations of UFJ Bank.

On August 12, 2004, we, along with Mitsubishi Tokyo Financial Group, Inc.,
Mitsubishi Trust Bank and Mitsubishi Securities Co, Ltd., or Mitsubishi
Securities, concluded a basic agreement with UFJ Holdings, Inc. and its
subsidiaries regarding a management integration of the holding companies,
banks, trust banks and securities companies of the two groups. Under the basic
agreement, we and UFJ Bank Limited are expected to merge to form a new bank, as
part of the overall management integration of the two groups.

In addition, on September 10, 2004, Mitsubishi Tokyo Financial Group, Inc., UFJ
Holdings and UFJ Bank entered into an agreement regarding Mitsubishi Tokyo
Financial Group, Inc.'s cooperation in strengthening the UFJ Group's capital.
Pursuant to this agreement, UFJ Bank issued 3.5 billion class E preferred
shares and Mitsubishi Tokyo Financial Group, Inc. purchased those shares for
(Yen)700 billion on September 17, 2004. The capital injection to UFJ Bank is
based on the assumption that our proposed management integration between
Mitsubishi Tokyo Financial Group and the UFJ Group will be completed as
outlined in the basic agreement between the two groups announced on August 12,
2004.

The discussions regarding the proposed integration are still ongoing and the
execution of a merger agreement and completion of the proposed transaction will
be subject to continued due diligence and negotiations between Mitsubishi Tokyo
Financial Group and the UFJ Group. The proposed management integration will
also be subject to approval by shareholders and relevant regulatory
authorities. Even after the capital strengthening, there is no assurance that
we will complete the proposed integration of our management and business with
the UFJ Group. Various factors, including litigation and possible competing
bids, could cause the proposed transaction to be delayed, materially altered or
abandoned. If we fail to complete the proposed integration with the UFJ Group,
we may suffer significant reputational harm.

Even if we complete the business combination transaction, we may encounter
additional difficulties in integrating the business and operations of the two
institutions. For example:

..   We may encounter difficulties integrating the domestic and overseas branch
    network, head office functions, information and management systems,
    personnel, and customer base of the two institutions. Significant and/or
    unexpected costs may be incurred during the process. As a result, we may
    not be able to enhance the convenience and efficiency of our branch network
    and operational systems as planned. In addition, we may fail to achieve our
    targeted cost reductions from the business integration.

..   Additional credit-related expenses or losses may be incurred as a uniform
    accounting and reserving policy is applied to the asset and loan portfolio
    of the two institutions.

..   The asset portfolio of UFJ Bank may suffer from unanticipated asset-quality
    problems, and significant losses may be incurred on write downs.

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If we are unable to resolve smoothly the problems that arise in the integration
process with the UFJ Group, our business, results of operations and financial
condition may be negatively affected. See "Item 5.A. Operating and Financial
Review and Prospects--Recent Developments--Basic Agreement Regarding the
Management Integration of Mitsubishi Tokyo Financial Group and the UFJ Group."

We may be adversely affected if the economic conditions in Japan worsen.

Since the early 1990s, the Japanese economy has performed poorly due to a
number of factors, including weak consumer spending and lower capital
investment by Japanese companies, causing a large number of corporate
bankruptcies and the failure of several major financial institutions. Although
recently certain economic indicators and stock prices have shown some signs of
recovery, if the recovery does not materialize or the economy weakens, then our
earnings and credit quality may be adversely affected. For a discussion of
Japan's current economic environment, see "Item 5.A. Operating and Financial
Review and Prospects--Operating Results--Business Environment--Economic
Environment in Japan."

Changes in interest rate policy, particularly unexpected or sudden increases in
interest rates, could adversely affect the value of our bond portfolio, problem
loans and our results of operations.

We hold a significant amount of Japanese government bonds and foreign bonds,
including U.S. Treasury bonds. An increase in relevant interest rates,
particularly if such increase is unexpected or sudden, may negatively affect
the value of our bond portfolio and reduce our so-called "spread," which is the
difference between the rate of interest we earn and the rate of interest we
pay. In addition, an increase in relevant interest rates may increase our
problem loans as some of our borrowers may not be able to meet the increased
interest payment requirements, thereby adversely affecting our results of
operations and financial condition. The yield on Japanese 10-year government
bonds, which is used as a benchmark for long-term interest rates, was at
approximately 0.7% in April 2003 and reached a record low of approximately 0.5%
in June 2003 before surging to approximately 1.9% in June and July 2004. In the
United States, the U.S. Federal Reserve raised its target for the federal funds
rate by 25 basis points respectively in June, August and September 2004 to
1.75%. For a detailed discussion of our bond portfolio, see "Selected
Statistical Data--Investment Portfolio."

Corporate credibility issues may increase our problem loans or otherwise
negatively affect our results of operations.

During the past few years, high-profile bankruptcy filings and reports of past
accounting irregularities, including fraud, in the United States and other
countries have raised corporate credibility issues, particularly with respect
to public companies. In response to these developments and regulatory responses
to these developments in the United States and elsewhere, regulators, auditors
and corporate managers generally have begun to review financial statements more
thoroughly and conservatively. As a result, additional accounting
irregularities and corporate governance issues may be uncovered and bring about
additional bankruptcy filings and regulatory action in the United States and
elsewhere. Such developments could increase our credit costs if they directly
involve our borrowers or indirectly affect our borrowers' credit.

We may not be able to maintain our capital ratios above minimum required
levels, which could result in the suspension of some or all of our operations.

We are required to maintain risk-weighted capital ratios above the levels
specified in the capital adequacy guidelines of the Financial Services Agency.
The capital ratios are calculated in accordance with Japanese banking
regulations based on information derived from our financial statements prepared
in accordance with Japanese GAAP. Our subsidiaries in California, UnionBanCal
Corporation and Union Bank of California, N.A., which we collectively refer to
as UNBC, are subject to similar U.S. capital adequacy guidelines. We or our
subsidiary banks may be unable to continue to satisfy the capital adequacy
requirements because of:

..   declines in the value of our securities portfolio;

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<PAGE>

..   credit costs we may incur as we dispose of problem loans and remove
    impaired assets from our balance sheet;

..   credit costs we may incur due to losses from a future deterioration in
    asset quality;

..   a reduction in the value of our deferred tax assets;

..   changes in accounting rules or in the guidelines regarding the calculation
    of bank holding companies' or banks' capital ratios;

..   our inability to refinance our subordinated debt obligations with equally
    subordinated debt;

..   adverse changes in foreign currency exchange rates; and

..   other adverse developments discussed in these Risk Factors.

If our capital ratios fall below required levels, the Financial Services Agency
could require us to take a variety of corrective actions, including withdrawal
from all international operations or suspension of all or part of our business
operations. For a discussion of our capital ratios and the related regulatory
guidelines, see "Item 4.B. Information on the Company--Business
Overview--Supervision and Regulation--Japan--Capital Adequacy" and "Item 5.B.
Operating and Financial Review and Prospects--Liquidity and Capital
Resources--Capital Adequacy."

Our capital ratios may also be negatively affected by contemplated or recently
adopted regulatory changes.

Several proposed regulatory changes and market factors could have an adverse
impact on our capital ratios. In particular, the Financial System Council of
the Financial Services Agency is discussing the adoption after April 2005 of
rules that limit the amount of deferred tax assets that may be included in the
calculation of Tier I and/or total regulatory capital. The imposition of any
such limits would likely reduce our regulatory capital, perhaps materially. At
March 31, 2004, our deferred tax assets amounted to (Yen)460 billion under
Japanese GAAP, which was included in our Tier I capital of (Yen)2,876 billion
calculated in accordance with Japanese GAAP as required by the Financial
Services Agency. In addition, effective March 31, 2003, the Financial Services
Agency strongly suggested that major banks calculate loan loss reserves for
certain impaired loans by analyzing the projected cash flows from those loan
assets, discounted to present value, instead of basing reserves on historical
loan loss data. We had already been employing a methodology to calculate our
loan loss reserves for these credits based on their estimated cash flows.
However, if in the future the Financial Services Agency adopts a calculation
methodology that is different from ours, the size of our allowance for loan
losses under Japanese GAAP could increase. Because our capital ratios are
calculated under Japanese GAAP, this change may reduce our capital ratios
materially. Further regulatory changes are expected based on the new framework
relating to regulatory capital requirements which were established by the Basel
Committee on Banking Supervision and endorsed by the central bank governors and
the heads of bank supervisory authorities of the Group of Ten (G10) countries
in June 2004.

Our results of operations and capital ratios will be negatively affected if we
are required to reduce our deferred tax assets.

We determine the amount of our net deferred tax assets and our regulatory
capital pursuant to Japanese GAAP and the Japanese banking regulations, which
differ from U.S. GAAP and U.S. regulations. Under current Japanese banking
regulations, all deferred tax assets established pursuant to Japanese GAAP are
included in regulatory capital. Currently, Japanese GAAP generally permits the
establishment of deferred tax assets for tax benefits that are expected to be
realized during a period that is reasonably foreseeable, generally five fiscal
years. The calculation of deferred tax assets is based upon various
assumptions, including assumptions with respect to future taxable income.
Actual results may differ significantly from these assumptions. Even if our
ability to include deferred tax assets in regulatory capital is not affected by
rule changes, if we conclude, based on our projections of future taxable
income, that we or our subsidiary banks will be unable to realize a portion of
the deferred tax assets, our deferred tax assets may be reduced and, as a
result, our results of operations may be negatively affected and our capital
ratios may decline.

                                      12

<PAGE>

We may not be able to refinance our subordinated debt obligations with equally
subordinated debt, and as a result our capital ratios may be adversely affected.

At March 31, 2004, subordinated debt accounted for approximately 29.2% of our
total regulatory capital (as calculated under Japanese GAAP). We may not be
able to refinance our subordinated debt obligations with equally subordinated
debt. The failure to refinance these subordinated debt obligations with equally
subordinated debt may reduce our total regulatory capital and, as a result,
negatively affect our capital ratios.

If the Japanese stock market declines, we may incur additional losses on our
securities portfolio and our capital ratios will be adversely affected.

We hold large amounts of marketable equity securities. The market values of
these securities are inherently volatile and have generally and substantially
been declining in recent years. The Nikkei-225 stock average declined to a
20-year low in April 2003 before recovering during fiscal 2003. We will incur
losses on our securities portfolio if the Japanese stock market declines in the
future. Material declines in the Japanese stock market may also materially
adversely affect our capital ratios. For a detailed discussion of our holdings
of marketable equity securities and the effect of market declines on our
capital ratios, see "Item 5.B. Operating and Financial Review and
Prospects--Liquidity and Capital Resources--Capital Adequacy" and "Selected
Statistical Data--Investment Portfolio."

The value of our equity portfolio could decline due to expected sales of shares
in the market by Japanese financial institutions.

Many Japanese financial institutions have traditionally held large amounts of
equity securities of their customers. In November 2001, the Japanese government
enacted a law forbidding bank holding companies and banks, including us, from
holding, after September 30, 2006, stock, the aggregate value of which is in
excess of their adjusted Tier I capital. Partly in response to this legislation
and partly to reduce risk-weighted assets, we and many other financial
institutions have been selling and will continue to sell off large amounts of
equity securities. The sale of equity securities by Japanese financial
institutions may depress the value of Japanese equity securities, including
those in our securities portfolio. In order to remain compliant with the new
legislation or to otherwise reduce our risk exposure, we may sell some of our
equity securities at larger discounts than we would otherwise sell at. For a
detailed discussion of our equity securities portfolio, see "Item 5.B.
Operating and Financial Review and Prospects--Liquidity and Capital
Resources--Financial Condition--Investment Portfolio" and "Selected Statistical
Data--Investment Portfolio."

Our efforts to reduce our cross-shareholdings of equity securities may
adversely affect our relationships with customers.

A substantial portion of our equity securities portfolio is held under
cross-shareholding relationships where we hold customers' securities for
business relationship purposes. The sales of equity securities, whether to
comply with the prohibition on holding stock in excess of adjusted Tier I
capital after September 30, 2006, to reduce our risk exposure to fluctuations
in equity security prices or otherwise, will reduce our cross-shareholdings,
which may have an adverse effect on our relationships with our customers. In
addition, our plans to reduce our cross-shareholdings may encourage some of our
customers to sell their shares of our common stock, which may have a negative
impact on our stock price.

                                      13

<PAGE>

Our trading and investment activities expose us to interest rate, exchange rate
and other risks.

We undertake extensive trading and investment activities involving a variety of
financial instruments, including derivatives. Our income from these activities
is subject to volatility caused by, among other things, changes in interest
rates, foreign currency exchange rates and equity and debt prices. For example:

..   Increases in interest rates have an adverse effect on the value of our
    fixed income securities portfolio, as discussed in "--Changes in interest
    rate policy, particularly unexpected or sudden increases in interest rates,
    could adversely affect the value of our bond portfolio, problem loans and
    our results of operations" above; and

..   The strengthening of the yen against the U.S. dollar and other foreign
    currencies reduces the value, in our financial statements, of our
    substantial portfolio of foreign-currency denominated investments.

In addition, downgrades of the credit ratings of some of the fixed income
securities in our portfolio could negatively affect our results of operations.
Our results of operations and financial condition in future periods will be
exposed to risks of loss associated with these activities. For a discussion of
our investment portfolio and related risks see "Item 5.B. Operating and
Financial Review and Prospects--Liquidity and Capital Resources--Financial
Condition--Investment Portfolio" and "Item 11. Quantitative and Qualitative
Disclosures about Credit, Market and Other Risk."

A significant downgrade of our credit ratings could have a negative effect on
us.

A significant downgrade of our credit ratings by one or more of the credit
rating agencies could have a negative effect on our treasury operations and
other aspects of our business. In the event of a downgrade of our credit
ratings, our treasury business unit may have to accept less favorable terms in
its transactions with counterparties, including capital raising activities, or
may be unable to enter into some transactions. This could have a negative
impact on the profitability of our treasury and other operations and adversely
affect our results of operations and financial condition.

We might have to pay risk premiums on borrowings from international financial
institutions or be subject to credit limitations by them.

As a result of concerns regarding asset quality and the failure of several
large Japanese financial institutions, international financial institutions
have in the past:

..   charged an additional risk premium to Japanese financial institutions for
    short-term borrowings in the interbank market; and

..   placed restrictions on the amount of credit, including interbank deposits,
    that they extend to Japanese banks.

These restrictions on credit resulted in higher operating expenses and
decreased profitability for affected Japanese banks. If conditions in the
Japanese banking and other financial sectors further deteriorate, international
markets could again impose risk premiums or credit restrictions on Japanese
banks, including us.

We may not be able to achieve the goals of our business strategies.

We are currently pursuing various business strategies to improve our
profitability. For various reasons, these strategies may be unsuccessful or
have unintended consequences. For example:

..   We may be unable to increase the volume of our loans to financially sound
    clients;

..   We may be unable to increase our lending spreads with pre-existing
    customers;

..   Greater competition or other market conditions may prevent us from
    increasing our level of fee income;

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<PAGE>

..   We may be unable to successfully implement and realize the benefits of our
    cost reduction plans and measures;

..   We may have difficulty in coordinating the operations of our subsidiaries
    and affiliates as planned due to legal restrictions, internal conflict or
    market resistance;

..   The costs of integration may be higher than we expect, and we may not
    achieve cost reductions as fully or as quickly as expected;

..   We may lose customers and business as we integrate and, in some cases,
    rebrand some of our subsidiaries' or affiliates' operations;

..   Our efforts to streamline operations may require more time than expected
    and cause some negative reactions from our customers;

..   New products and services we introduce may not gain acceptance among
    customers; and

..   We may have difficulty integrating the systems within our group.

We will be exposed to increased risks as we expand the range of our products
and services.

As we expand the range of our products and services beyond our traditional
banking and trust businesses and as the sophistication of financial products
and management systems grows, we will be exposed to new and increasingly
complex risks. For example, we are expanding our securities business through
Mitsubishi Securities, which was formed in September 2002. Additionally, in
March 2004 we entered into a strategic business and capital alliance with ACOM
CO., LTD., or ACOM, a leading Japanese consumer finance company, to enhance our
consumer finance operations. We may have only limited experience with the risks
related to the expanded range of these products and services. To the extent we
expand our product and service offerings through acquisitions, we face risks
relating to the integration of acquired businesses with our existing
operations. Moreover, some of the activities which we engage in, such as
derivatives and foreign currency trading, present volatile and substantial
risks. Our risk management systems may prove to be inadequate and may not work
in all cases or to the degree required. As a result, we are subject to
substantial market, credit and other risks in relation to the expanding scope
of our products and services and trading activities, which could result in our
incurring substantial losses. In addition, our efforts to offer new services
and products may not succeed if product or market opportunities develop more
slowly than expected or if the profitability of opportunities is undermined by
competitive pressures. For a detailed discussion of our risk management
systems, see "Item 11. Quantitative and Qualitative Disclosures about Credit,
Market and Other Risk."

Any adverse changes in UNBC's business could significantly affect our results
of operations.

UNBC contributes to a significant portion of our net income. Any adverse change
in the business or operations of UNBC could significantly affect our results of
operations. Factors that could negatively affect UNBC's results include adverse
economic conditions in California, including the decline in the technology
sector, the state government's financial condition, a potential downturn in the
real estate and housing industries in California, substantial competition in
the California banking market, growing uncertainty over the U.S. economy due to
the threat of terrorist attacks, fluctuating oil prices and rising interest
rates, and negative trends in debt ratings and equity valuations of various
borrowers increasing the risk of corporate bankruptcy filings. For a detailed
segment discussion relating to UNBC, see "Item 5.A. Operating and Financial
Review and Prospects--Operating Results--Business Segment Analysis."

We are exposed to substantial credit and market risks in Asia, Latin America,
and other regions.

We are active in Asia, Latin America and other regions through a network of
branches and subsidiaries and are thus exposed to a variety of credit and
market risks associated with countries in these regions. A decline in the

                                      15

<PAGE>

value of Asian, Latin American or other relevant currencies could adversely
affect the creditworthiness of some of our borrowers in those regions. The
loans we make to Asian, Latin American and other overseas borrowers and banks
are often denominated in yen, U.S. dollars or other foreign currencies. These
borrowers often do not hedge the loans to protect against fluctuations in the
values of local currencies. A devaluation of the local currency would make it
more difficult for a borrower earning income in that currency to pay its debts
to us and others. In addition, some countries in which we operate may attempt
to support the value of their currencies by raising domestic interest rates. If
this happens, the borrowers in these countries would have to devote more of
their resources to repaying their domestic obligations, which may adversely
affect their ability to repay their debts to us and other foreign lenders. The
limited credit availability resulting from these and related conditions may
adversely affect economic conditions in some countries. This could cause a
further deterioration of the credit quality of borrowers and banks in those
countries and cause us to incur further losses. In addition, we are active in
other regions that expose us to risks similar to the risks described above and
also risks specific to those regions, which may cause us to incur losses or
suffer other adverse effects. For a more detailed discussion of our credit
exposure to Asian, Latin American and other relevant countries, see "Item 5.B.
Operating and Financial Review and Prospects--Liquidity and Capital
Resources--Financial Condition--Allowance for Credit Losses, Nonperforming and
Past Due Loans."

Our income and expenses relating to our international operations and our
foreign assets and liabilities are all exposed to foreign currency fluctuations.

Our international operations are subject to fluctuations in foreign currency
exchange rates against the Japanese yen. When the yen appreciates, yen amounts
for transactions denominated in foreign currencies, including a substantial
portion of UNBC's transactions, decline. In addition, a portion of our assets
and liabilities are denominated in foreign currencies. To the extent that our
foreign-currency denominated assets and liabilities are not matched in the same
currency or appropriately hedged, fluctuations in foreign currency exchange
rates against the yen may adversely affect our financial condition, including
our capital ratios. In addition, fluctuations in foreign exchange rates will
create foreign currency translation gains or losses. For a historical
discussion of the effect of changes in foreign currency exchange rates, see
"Item 5.A. Operating and Financial Review and Prospects--Operating
Results--Effect of Change in Exchange Rate on Foreign Currency Translation."

Losses relating to our pension plans and a decline in returns on our plan
assets may negatively affect our results of operations and financial condition.

We may incur losses if the fair value of our pension plans' assets declines, if
the rate of return on our pension assets declines or if there is a change in
the actuarial assumptions on which the calculations of the projected benefit
obligations are based. Changes in the interest rate environment and other
factors may also adversely affect the amount of unfunded pension obligations
and the resulting annual amortization expense.

Our business and operations are exposed to various system, political and social
risks beyond our control.

As a major financial institution, our business and operations are significantly
dependent upon the domestic and world economies and are thus exposed to various
system, political and social risks beyond our control. Recent examples include
the disruption of the Internet and other information networks due to major
virus outbreaks, major terrorist activity such as the September 11 attacks, the
ongoing conflict in Iraq and other serious political instability, and major
health epidemics such as the outbreak of severe acute respiratory syndrome, or
SARS. Such incidents may directly affect our business and operations by
disrupting our operational infrastructure or internal systems. Such incidents
may also negatively impact the economic conditions, political regimes and
social infrastructure of countries and regions in which we operate, and
possibly the global economy as a whole. These various factors beyond our
control, as well as the threat of such risks or related countermeasures, may
materially and adversely affect our business, operating results and financial
condition.

                                      16

<PAGE>

We may be subject to liability and regulatory action if we are unable to
protect personal and other confidential information.

In recent years, there have been public reports of personal information and
records in the possession of corporations and institutions being leaked or
improperly accessed. In the event that personal information in our possession
about our customers is leaked or improperly accessed and subsequently misused,
we may be subject to liability and regulatory action. The standards applicable
to us are expected to become more stringent under the new Personal Information
Protection Act, which is scheduled to take effect from April 2005. As an
institution in possession of personal information, we may have to provide
compensation for economic loss and emotional distress arising out of a failure
to protect such information in accordance with the Personal Information
Protection Act. In addition, such incidents could create a negative public
perception of our operations, systems or brand, which may in turn decrease
customer and market confidence and materially and adversely affect our
business, operating results and financial condition.

Adverse regulatory developments or changes in laws, government policies or
economic controls could have a negative impact on our results of operations.

We conduct our business subject to ongoing regulation and associated regulatory
risks, including the effects of changes in the laws, regulations, policies,
voluntary codes of practice and interpretations in Japan and the other markets
which we operate in. Future developments or changes in laws, regulations,
policies, voluntary codes of practice, fiscal or other policies and their
effects are unpredictable and beyond our control. In particular, the Financial
Services Agency announced various regulatory changes that it would consider.
The Financial Services Agency also has the authority to conduct, at any time,
inspections to review banks' accounts, including those of ours. Any of the
changes referred to above or any action that must be taken by us, whether as a
result of regulatory developments or changes or inspections, could negatively
affect our business and results of operations.

Our business may be adversely affected by competitive pressures, which have
increased significantly due to regulatory changes.

In recent years, the Japanese financial system has been increasingly
deregulated and barriers to competition have been reduced. In addition, the
Japanese financial industry has been undergoing significant consolidation, as a
result of which larger and more integrated financial institutions have emerged
as our competitors. If we are unable to compete effectively in this more
competitive and deregulated business environment, our business, results of
operations and financial condition will be adversely affected. For a more
detailed discussion of our competition in Japan, see "Item 4.B. Information on
the Company--Business Overview--Competition--Japan."

Risks Related to Owning Our Subordinated Debt Securities

The indenture will not limit our ability to incur additional debt, including
senior debt.

The indenture relating to our 8.40% global senior subordinated notes due 2010
does not limit or restrict the amount of other indebtedness, including senior
indebtedness, that we or our subsidiaries may incur in the future.

The subordination provisions in our subordinated debt securities could hinder
your ability to receive payment.

Under some circumstances, your right to receive payment on our 8.40% global
senior subordinated notes due 2010 will be subordinated and subject in right of
payment in full to the prior payment of all our senior indebtedness. We expect
from time to time to incur additional indebtedness and other obligations that
will constitute senior indebtedness, and the indenture relating to our 8.40%
global senior subordinated notes due 2010 does not contain any provisions
restricting our ability to incur senior indebtedness.

                                      17

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Item 4. Information on the Company.

A. History and Development of the Company

We are a major commercial banking organization in Japan and provide a broad
range of domestic and international banking services from our offices in Japan
and around the world. We are a "city" bank, as opposed to a regional bank. Our
registered head office is located at 7-1, Marunouchi 2-chome, Chiyoda-ku, Tokyo
100-8388, Japan, and our telephone number is 81-3-3240-1111. We are a joint
stock company (kabushiki kaisha) incorporated in Japan under the Japanese
Commercial Code.

We were formed through the merger, on April 1, 1996, of The Mitsubishi Bank,
Limited and The Bank of Tokyo, Ltd. The origins of Mitsubishi Bank can be
traced to the Mitsubishi Exchange Office, a money exchange house established in
1880 by Yataro Iwasaki, a key figure in the Japanese industrial revolution and
the founder of the Mitsubishi industrial, commercial and financial group. In
1895, the Mitsubishi Exchange Office was succeeded by the Banking Division of
the Mitsubishi Goshi Kaisha, the holding company of the "Mitsubishi group" of
companies, that began in the late 19th century with interests in shipping and
trading. Mitsubishi Bank had been a principal bank to many of the Mitsubishi
group companies, but broadened its relationships to cover a wide range of
Japanese industries, small and medium-sized companies and individuals.

Bank of Tokyo was established in 1946 as a successor to The Yokohama Specie
Bank, Ltd., a special foreign exchange bank established in 1880. In the postwar
period, because of the need to establish a financial institution specializing
in foreign trade financing, the government of Japan promulgated the Foreign
Exchange Bank Law in 1954, and Bank of Tokyo became the only bank licensed
under that law. Because of its license, Bank of Tokyo received special
consideration from the Ministry of Finance in establishing its offices abroad
and in many other aspects relating to foreign exchange and international
finance. The worldwide network of Bank of Tokyo was more extensive than that of
any other Japanese bank, and through this network, Bank of Tokyo was engaged in
a full range of commercial banking activities, both in Japan and overseas,
serving the diverse financial requirements of its clients throughout the world.

We are a member of the "Mitsubishi group" of companies. The expression
"Mitsubishi group" is used to describe 29 companies with historical links to a
prewar group of companies that were under common control. Although there are
numerous, generally small, cross-shareholdings among these companies even today
and frequent organized gatherings of their chairmen and presidents, since the
end of World War II, the Mitsubishi group companies have been managed and
operated independently. The shares of 21 of the Mitsubishi group companies are
publicly listed in Japan, and these companies are engaged in a broad range of
activities including manufacturing, trading, natural resources, transportation,
real estate, banking and insurance.

On April 2, 2001, we, Mitsubishi Trust Bank and Nippon Trust Bank established
Mitsubishi Tokyo Financial Group, Inc., or Mitsubishi Tokyo Financial Group, to
be a holding company for the three of us. Before that, each of us had been a
publicly held company. On April 2, 2001, through a stock-for-stock exchange,
each of us became a wholly-owned subsidiary of Mitsubishi Tokyo Financial
Group. Nippon Trust Bank was later merged into Mitsubishi Trust Bank. As a
result, we and Mitsubishi Trust Bank are now both directly held subsidiary
banks of Mitsubishi Tokyo Financial Group, although each of our two banks also
has other subsidiaries of its own.

On September 1, 2002, we completed the merger of our securities subsidiaries
and affiliate, KOKUSAI Securities Co., Ltd., Tokyo-Mitsubishi Securities Co.,
Ltd. and Tokyo-Mitsubishi Personal Securities Co., Ltd., and Mitsubishi Trust
Bank's securities affiliate, Issei Securities Co., Ltd., to form Mitsubishi
Securities. Since the merger, we have been consolidating various areas of our
securities and investment banking business, such as mergers and acquisitions,
part of its derivative operations, corporate advisory and securitization
operations, under Mitsubishi Securities.

For information on the proposed management integration between Mitsubishi Tokyo
Financial Group, Inc. and its subsidiaries, including us, and UFJ Holdings and
its subsidiaries, see "Item 5.A. Operating and Financial

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Review and Prospects--Recent Developments--Basic Agreement Regarding the
Management Integration of Mitsubishi Tokyo Financial Group and the UFJ Group."

B. Business Overview

We are a major Japanese commercial banking organization. We provide a broad
range of domestic and international banking services in Japan and around the
world. As of June 1, 2004, our network in Japan included 248 branches, 19
sub-branches, 57 loan plazas, 490 branch ATMs and 16,639 convenience
store-based, non-exclusive ATMs. We organize our operations based on customer
and product segmentation, as follows:

..   retail banking;

..   commercial banking;

..   global corporate banking;

..   investment banking and asset management, and Mitsubishi Securities;

..   UNBC;

..   operations services;

..   treasury; and

..   other, including systems services and eBusiness & IT initiatives.

For a detailed analysis of financial results by business segments, which is
mainly based on our business organizations, see "Item 5.A. Operating and
Financial Review and Prospects--Operating Results--Business Segment Analysis."
For a detailed analysis of financial results by geographic segment, see "Item
5.A. Operating and Financial Review and Prospects--Operating
Results--Geographic Segment Analysis."

As discussed above, in April 2004, Mitsubishi Tokyo Financial Group, Inc.
introduced an integrated business group system which combines the operations of
us and Mitsubishi Trust Bank into three core business areas: Retail, Corporate
and Trust Assets (Asset Management and Administration). Under the integrated
business group system, each of our business units will further cooperate with
our other business units and the various business groups of Mitsubishi Trust
Bank. For example,

..   Mitsubishi Securities will collaborate with the retail banking business
    unit to develop and offer products and services for our retail clients as
    part of our Integrated Retail Banking Business Group.

..   The commercial banking business unit, the global corporate banking business
    unit, the investment banking and asset management business unit and
    Mitsubishi Securities will work together to develop and provide products
    and services for our corporate clients as part of our Integrated Corporate
    Banking Business Group.

..   Our IT solution business, which is part of the eBusiness and IT initiatives
    business unit, will also offer services as part of our Integrated Corporate
    Banking Business Group.

..   Our asset management services and global custody services, which is part of
    the investment banking and asset management business unit, will collaborate
    with business groups of Mitsubishi Trust Bank to offer services and
    products as part of our Integrated Trust Assets Business Group.

The UNBC business unit, the operations services unit, the treasury unit, the
system services unit, the eBusiness & IT initiatives unit with the exception of
IT solution business, and the corporate center are not part of Mitsubishi Tokyo
Financial Group's integrated business group system.

Retail Banking Business Unit

Our retail banking business unit offers a full range of banking products and
services, including financial consulting services, to individual customers in
Japan. In addition to our branch offices and other direct

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distribution channels, the retail banking business unit offers products and
services through e-net ATMs (a convenience store-based ATM network utilized by
a number of different banks), telephone and internet banking services and mail
order. Some of our branches are joint branches with either Mitsubishi Trust
Bank or Mitsubishi Securities, or both.

Deposits and loans. The unit offers a full range of bank deposit products. One
such product is a multiple purpose bank account that not only includes ordinary
deposits but also has overdraft privileges collateralized by time deposits,
bank debentures and public bonds held in custody. The unit also offers housing
loans, educational loans, special purpose loans, card loans and other loans to
individuals.

Individual annuity insurance. The unit has been actively promoting the sales of
individual annuity insurance products since the Japanese government lifted the
prohibition against sales of such products by Japanese banks in October 2002.
The unit's current product lineup features capital guarantee variable annuity
products and foreign currency-denominated fixed annuity insurance products. The
latter lets customers choose between US dollar and euro denominations, and is
the first such annuity insurance product introduced in Japan. In April 2004, we
also introduced the first annuity insurance in Japan to offer an annuity
capital guarantee at 110% of the basic benefit amount, which was also the first
product developed as part of an alliance with Manulife Life Insurance Company.

Investment trusts. The unit offers 29 equity and bond funds and a program fund,
the M-CUBE program, which is exclusively organized for us by Frank Russell
Company, and combines four specific funds. We offer a menu of funds that allows
our customers to achieve their desired balance of risk diversification and
return.

As part of the effort to realize synergies between us and Mitsubishi Trust
Bank, the unit markets to its retail customers select trust products of
Mitsubishi Trust Bank under a trust agency arrangement.

Tokyo-Mitsubishi Direct. The unit offers a telephone and internet banking
service called Tokyo-Mitsubishi Direct. Since the service was launched in 1999,
the number of customers has risen steadily, reaching 2.4 million individual
customers at the end of March 2004, which is approximately 17% of the unit's
total customer base.

Credit cards. The unit offers MasterCard and VISA credit cards through several
channels. We offer the Tokyo-Mitsubishi Card. We also offer credit cards
through our subsidiaries, DC Card Co., Ltd. and Tokyo Credit Service, Ltd.

Tokyo-Mitsubishi Cash One. Since March 2002, the unit has offered loans to its
customers through Tokyo-Mitsubishi Cash One Ltd., a consumer credit company
established jointly by us, Mitsubishi Trust Bank and three leading Japanese
consumer credit companies: ACOM, DC Card and JACCS Co., Ltd.

Commercial Banking Business Unit

As part of Mitsubishi Tokyo Financial Group's Integrated Corporate Banking
Business Group, our commercial banking business unit mainly provides banking
products and services to a wide range of business customers, from large
corporations to medium-sized and small businesses, and is responsible for
customer relationships. The unit serves these customers through 115 offices in
Japan as well as directly from its headquarters. The unit provides traditional
commercial banking services, such as deposits, settlement, foreign exchange and
loans, as well as trust products of Mitsubishi Trust Bank, electronic banking
and highly sophisticated consultancy services to meet its customers' needs. The
unit works closely with other business units, such as the global corporate
banking business unit, the treasury unit and the investment banking and asset
management business unit.

Financing and fund management. The unit advises on financing methods for our
customers' various financing needs, including loans with derivatives, corporate
bonds, commercial paper, asset backed securities, securitization programs and
syndicated loans. The unit also offers a wide range of products to meet our
customers' fund management needs, such as deposits with derivatives, government
bonds, debenture notes and investment funds.

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Advice on business expansion overseas. The unit provides advisory services to
clients launching businesses overseas, particularly Japanese companies
expanding into other Asian countries.

Settlement services. The unit provides electronic banking services that allow
customers to make domestic and overseas remittances electronically. The unit's
settlement and cash management services include global settlement services,
Global Cash Management Services, a global pooling/netting service, and Treasury
Station, a fund management system for group companies. These services are
particularly useful to customers who do business worldwide.

Risk management. The unit offers swap, option and other risk-hedge programs to
customers seeking to control foreign exchange, interest rate and other business
risks.

Corporate management/financial strategies. The unit provides advisory services
to customers in the areas of mergers and acquisitions, inheritance-related
business transfers and stock listings. The unit also helps customers develop
financial strategies to restructure their balance sheets. These strategies
include the use of credit lines, factoring services and securitization of real
estate.

Corporate welfare facilities. The unit offers products and administrative
services to help customers with employee benefit plans. As a service to our
customers, the unit often provides housing loans to our customers' employees.
The unit also provides company-sponsored employee savings plans and defined
contribution plans.

Global Corporate Banking Business Unit

Our global corporate banking business unit provides banking services to large
Japanese corporations and their overseas operations as well as to non-Japanese
corporations who do business on a global basis. The unit serves customers
through corporate banking divisions in Tokyo, a global network of 57 overseas
branches and sub-branches, 16 representative offices and overseas banking
subsidiaries.

Overseas business support. The unit provides a full range of services to
support customers' overseas activities, including loans, deposits, assistance
with mergers and acquisitions and cash management services. The unit provides
financial services to customers in cooperation with other business units, such
as the treasury unit and the investment banking and asset management business
unit, and also through subsidiaries that are part of those units, such as
Mitsubishi Securities, Mitsubishi Securities International plc (formerly
Tokyo-Mitsubishi International plc) and BTM Capital Corporation.

During the fiscal year ended March 31, 2004, the unit provided advisory
services to help customers develop financial strategies, such as arranging the
issuance of asset-backed commercial paper, providing credit commitments and
securitizing real estate in Japan. Together with the investment banking and
asset management business unit, the unit also developed its investment banking
business to increase our non-interest income.

Global Cash Management Service. We started offering Global Cash Management
Service, or GCMS, through our foreign branches. This service allows customers
to monitor their foreign accounts and make remittances through their personal
computers and we have introduced several enhancements such as internet-based
access and Chinese-language capability. This service is now available through
21 foreign branches and the total number of GCMS corporate customers was over
2,270 as of March 31, 2004, an increase of about 470 customers compared to that
as of March 31, 2003.

Investment Banking and Asset Management Business Unit and Mitsubishi Securities

Our investment banking business unit and asset management business unit were
merged in May 2003 to form the investment banking and asset management business
unit.

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   Investment Banking

The unit provides capital markets, derivatives, securitization, syndicated
loans, structured finance and other services. Our other business units
cooperate with the investment banking and asset management business unit in
offering services to customers. In addition, BTM Capital Corporation and BTM
Leasing & Finance, Inc. provide leasing services to their customers.

Capital Markets. The unit provides arrangement services relating to private
placements for mainly medium-sized enterprise issuers and institutional
investors. During the fiscal year ended March 31, 2004, we arranged 853
issuances totaling (Yen)234.5 billion.

Derivatives. The unit develops and offers derivatives products for risk
management and other financial needs. The unit has trading desks and sales
teams specializing in derivatives in Tokyo, Singapore, Hong Kong, London and
New York.

Securitization. In the securitization area, the unit is primarily engaged in
asset-backed commercial paper programs and has securitization teams based in
Tokyo, New York and London. It continues to develop and structure new types of
transactions.

Syndicated loans. The unit structures and syndicates many types of loan
transactions, including term loans, revolving credit and structured
transactions. It has loan syndication operations in Tokyo, New York, London,
Hong Kong and Singapore. We arranged syndicated loans with an aggregate
principal amount totaling $44.0 billion in the year ended December 31, 2003.

Structured finance. The unit engages in project finance, lease finance, real
estate finance, lease related finance, and other types of non-recourse or
limited-recourse and structured financings. It provides customers with
financial advisory services, loan arrangements and agency services. It has
teams located in Tokyo, Hong Kong, Singapore, London, New York and Boston.

Other investment banking services. In the United States, the unit offers
leasing services through two subsidiaries, BTM Capital Corporation and BTM
Leasing & Finance. BTM Capital Corporation offers a wide range of leasing
services to non-Japanese customers, while BTM Leasing & Finance focuses on
providing services to the U.S. subsidiaries and affiliates of Japanese
corporations.

   Asset Management

The unit provides asset management and trust products and services mainly to
high net worth individuals, branch customers and corporate clients in Japan.
Generally, these products and services are delivered to our customers through
the retail banking business unit and the commercial banking business unit, and
are provided by Tokyo-Mitsubishi Asset Management, Ltd. and Mitsubishi Trust
Bank.

Asset management. Tokyo-Mitsubishi Asset Management, Ltd., a licensed
discretionary investment advisor and investment trust management company,
provides investment management and advisory services for institutional
investors, including pension funds. It also offers a wide array of investment
products which, as of March 31, 2004, are marketed by almost 60 Japanese
financial institutions, including us and regional banks, mainly to individual
customers.

Tokyo-Mitsubishi Asset Management has continued to expand its investment
product line. In the fiscal year ended March 31, 2004, it launched a new fund
that mainly invests in fixed-income securities issued by foreign governments
and pays dividends quarterly.

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<PAGE>

We and Tokyo-Mitsubishi Asset Management also maintain business relationships
with Mellon Financial Group, Frank Russell Company, Ltd. and Schroder
Investment Management (Japan) Ltd. Tokyo-Mitsubishi Asset Management
distributes sophisticated investment products provided by these institutions.

Advice on Defined Contribution Plans. We provide consulting services for
defined contribution plans through Defined Contribution Plan Consulting of
Japan Co., Ltd., which was established by us in alliance with Mitsubishi Trust
Bank, Meiji Yasuda Life Insurance Company and Tokio Marine & Fire Insurance,
Ltd., following legislation introduced in October 2001. Defined Contribution
Plan Consulting of Japan provides a full range of services, such as plan
administration services and advising clients in the selection of investment
products, to meet various needs for our corporate clients and the plan
participants.

Wealth management. In 2002, two wealth management companies were established to
capitalize on our wealth management resources and capabilities. In August 2002,
Mitsubishi Tokyo Wealth Management Securities, Ltd. began its operations, and
in September 2002, Mitsubishi Tokyo Wealth Management (Switzerland), Ltd. took
over the private banking business from Bank of Tokyo-Mitsubishi (Switzerland),
Ltd. These two subsidiaries provide sophisticated and broad investment services
and solutions to high net worth customers.

   Mitsubishi Securities

Mitsubishi Securities offers investment banking services, including
securities-related services, and advice on mergers and acquisitions and
corporate advisory matters, to its customers.

In September 2002, we merged our securities subsidiaries and affiliate, KOKUSAI
Securities Co., Ltd., Tokyo-Mitsubishi Securities Co., Ltd. and
Tokyo-Mitsubishi Personal Securities Co., Ltd., and Mitsubishi Trust Bank's
securities affiliate, Issei Securities Co., Ltd., to create Mitsubishi
Securities. As of March 31, 2004, we owned 54.11% of Mitsubishi Securities.
Mitsubishi Securities functions as the core of our securities and investment
banking business. Since the merger, we have consolidated most of our securities
business and various areas of our investment banking business, such as mergers
and acquisitions, derivatives, corporate advisory and securitization operations
that were previously conducted through our investment banking unit, into
Mitsubishi Securities. In the fiscal year ended March 31, 2003, we started to
account for Mitsubishi Securities as a separate segment for financial
management purposes. For more details, see "Item 5.A. Operating and Financial
Review and Prospects--Operating Results--Business Segment Analysis."

In addition to its own branch network, Mitsubishi Securities caters to the
needs of individual investors in cooperation with us and Mitsubishi Trust Bank
through joint branches and MTFG Plazas that provide a variety of financial
products and services targeted toward individual investors. As of March 31,
2004, Mitsubishi Securities had 69 offices, 30 of which had been converted to
joint branches with us or Mitsubishi Trust Bank.

In the fixed income securities business, Mitsubishi Securities offers customers
a wide range of investment products. Mitsubishi Securities provides in-depth
company and strategy reports through its in-house research functions and its
equity sales staff provides services to a wide range of domestic and overseas
clients ranging from individual investors to institutional investors. Through
its derivative products, Mitsubishi Securities provides various solutions to
meet customers' risk management needs. Other services offered by Mitsubishi
Securities include bond underwriting, equity underwriting, securitization of
assets, initial public offerings, mergers and acquisitions, and support for
investor relations activities. To reinforce its global network, Mitsubishi
Securities acquired the overseas securities subsidiaries in New York, Hong Kong
and Singapore in 2003, and made Tokyo-Mitsubishi International plc (currently
Mitsubishi Securities International plc) in London into its subsidiary in July
2004.

UNBC Business Unit

As of June 30, 2004, we owned 62.1% of UnionBanCal Corporation, a publicly
traded company listed on the New York Stock Exchange. UnionBanCal is a U.S.
commercial bank holding company. Union Bank of

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California, N.A., UnionBanCal's bank subsidiary, is one of the largest
commercial banks in California based on total assets and total deposits and is
among the oldest banks on the West Coast, having roots as far back as 1864.

UNBC provides a wide range of financial services to consumers, small
businesses, middle-market companies and major corporations, primarily in
California, Oregon and Washington but also nationally and internationally.

UNBC's operations are divided into four primary groups.

The Community Banking and Investment Services Group. This group offers its
customers a wide spectrum of financial products within its comprehensive
lineup. With a broad line of checking and savings, investment, loan and
fee-based banking products, individual and business clients, including
not-for-profit, small and institutional investors, can each have their specific
needs met. As of June 30, 2004, these products are offered in 301 full-service
branches, primarily in California, as well as in Oregon and Washington. In
addition, the group offers international and settlement services, e-banking
through its website, check cashing services at its Cash & Save locations and
loan and investment products tailored to its high net worth consumer customers
through its private banking business. Institutional customers are offered
employee benefit, 401(k) administration, corporate trust, securities lending
and custody (global and domestic) services. The group also includes a
registered broker-dealer and a registered investment advisor, which provide
investment advisory services and manage a proprietary mutual fund family.

In accordance with its strategies to diversify earnings and broaden its branch
network, UNBC aims to expand its business through targeted acquisitions,
including banks and insurance agencies. For example, in 2001 UNBC acquired the
Fullerton, California-based Armstrong/Robitaille, Inc. UNBC then acquired the
San Diego, California-based John Burnham & Company in 2002 before acquiring two
additional regional insurance brokers, Pleasanton, California-based Tanner
Insurance Brokers, Inc., and Glendale, California-based Knight Insurance Agency
in 2003. With offices in California and Oregon, these acquisitions allow UNBC
to offer an extensive array of cost-effective risk management services and
insurance products to business and retail customers.

During 2002, UNBC acquired the Simi Valley, California-based First Western Bank
and Santa Clarita, California-based Valencia Bank & Trust, which added $490
million in assets to UNBC's balance sheet and 12 branches to its branch
network. During 2003, UNBC acquired the Watsonville, California-based Monterey
Bay Bank, which added $632 million in assets to its balance sheet and eight
branches to its branch network. In January 2004, UNBC acquired Business Bank of
California, a commercial bank headquartered in San Bernardino, California, with
$704 million in assets and 15 full-service branches. The integration of these
banks expanded UNBC's geographic footprint in both Southern and Northern
California and allows UNBC to expand its client base while offering existing
consumer and commercial customers a fuller range of financial services. In July
2004, UNBC announced that it will acquire Jackson Federal Bank, which operates
14 branches in Southern California. As of June 30, 2004, Jackson Federal Bank
had $1.2 billion in outstanding loans and $1.1 billion in deposits.

The Commercial Financial Services Group. This group offers a variety of
commercial financial services, including commercial loans and project
financing, real estate financing, asset-based financing, trade finance and
letters of credit, lease financing, customized cash management services and
selected capital markets products. The group's customers include middle-market
companies, large corporations, real estate companies and other more specialized
industry customers. In addition, specialized depository services are offered to
title and escrow companies, retailers, domestic financial institutions,
bankruptcy trustees and other customers with significant deposit volumes.

The International Banking Group. This group primarily provides correspondent
banking and trade finance-related products and services to financial
institutions worldwide, primarily in Asia. This group has a long and stable
history of providing these services to that market.

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The Global Markets Group. This group, in collaboration with other UNBC business
groups, offers customers a broad range of products. They include a variety of
foreign exchange products and risk management products, such as interest rate
swaps and options. The group trades money market and fixed income securities in
the secondary market and serves institutional investment needs. The group also
manages market-related risks for UNBC as part of its responsibilities for
asset/liability management, including funding UNBC's liquidity needs and
addressing its interest rate risk.

Operations Services Unit

Through the operations services unit, we provide operations and settlement
services to our other business units. The unit also earns fee income by
providing settlement and remittance services, including correspondent banking
services, to our customers. In addition, the unit also offers competitive
operations and settlement services to other financial institutions to meet
their outsourcing needs.

Operations services. The operations division of our operations services unit
provides operations services for the domestic commercial banking activities of
the retail banking, commercial banking and global corporate banking business
units. We have also expanded centralized processing at our operations centers,
which will increase the efficiency of our branch offices. On March 31, 2004, we
entered into an alliance with 23 other regional banks to cooperate with regard
to logistics among domestic branches in order to achieve more efficient branch
network operations.

The operations division also offers outsourcing services in foreign remittance,
export and import operations for Japanese financial institutions. As of March
31, 2004, 69 Japanese banks utilized our foreign remittance services offered
under our Global Operation Automatic Link (GOAL) service, and a number of
Japanese banks outsourced their export and import operations to us.

Correspondent banking and settlement. The payment and clearing services
division of our operations services unit maintains financial institutions'
accounts with correspondent arrangements. As of March 31, 2004, we had
correspondent arrangements with 2,980 foreign banks and other financial
institutions, of which 1,646 had yen settlement accounts with us. We also had
correspondent arrangements with 133 Japanese financial institutions, for which
we held 142 yen and foreign currency accounts.

The Foreign Exchange Yen Clearing System in Japan introduced an entrustment
procedure for yen clearing through which banks may entrust other banks to
conduct yen clearing for them. We have the largest share of this business in
the market. As of March 31, 2004, 46 regional and foreign banks in Japan
outsourced their yen clearing operations to us. We handled approximately 25% of
these transactions based on transaction amounts and are a market leader in the
yen settlement business.

Our payment and clearing services division is also taking the initiative in the
global implementation of the Continuous Linked Settlement operation, which is
intended to eliminate the settlement risk that can occur when foreign exchange
deals are settled.

Treasury Unit

Our treasury unit manages the overall funding requirements. The unit is
responsible for our asset liability management and manages our securities
investment portfolio, foreign exchange and derivatives transactions, including
proprietary trading. It works with other business units to provide various
financial products such as foreign currency forward, currency options and
commercial paper.

The treasury unit is active in financial markets worldwide and has global
treasury offices in Tokyo, New York, London, Singapore and Hong Kong.

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As part of our asset liability management, the treasury unit seeks to control
our interest rate and liquidity risks and to make it possible for us to conduct
our investment and fund-raising activities within an appropriate range of risk.
The treasury unit centrally monitors and manages all of our interest rate risks
and liquidity risks.

In the international money markets, the treasury unit raises foreign currency
funds through inter-bank transactions, deposits and certificates of deposit. It
actively deals in short-term yen-denominated instruments, such as interest rate
swaps, futures and options on futures. We are a major market maker in
short-term yen interest rate swaps.

We are a leading market maker for the Tokyo foreign exchange and
over-the-counter currency option markets. We have a large market share of
transactions in the US dollar-yen sector and in other major cross currency and
currency option trading.

The unit also actively trades in the secondary market for Japanese government
bonds, local government bonds and government guaranteed bonds.

Other Business Units

In addition to the above, we also have other business units including:

..   system services, which is responsible for our computer systems;

..   eBusiness & IT initiatives, which is responsible for developing and
    overseeing our information technology as well as related business
    opportunities; and

..   the corporate center, which retains functions such as our strategic
    planning, overall risk management, internal auditing and compliance.

Competition

We face strong competition in all of our principal areas of operation. The
deregulation of the Japanese financial markets as well as structural reforms in
the regulation of the financial industry have resulted in dramatic changes in
the Japanese financial system. Structural reforms have prompted Japanese banks
to merge or reorganize their operations, thus changing the nature of the
competition from other financial institutions as well as from other types of
businesses.

Japan

Deregulation. Competition in Japan has intensified as a result of the
relaxation of regulations relating to Japanese financial institutions.
Previously, there were various restrictions, such as foreign exchange controls,
ceilings on deposit interest rates and restrictions that compartmentalized
business sectors. These restrictions served to limit competition. However, as a
result of the deregulation of the financial sector, such as through the
"Financial Big Bang" which was announced in 1996, most of these restrictions
were lifted before 2000. Deregulation has eliminated barriers between different
types of Japanese financial institutions, which are now able to compete
directly against one another. Deregulation and market factors have also
facilitated the entry of various large foreign financial institutions into the
Japanese domestic market.

The Law Amending the Relevant Laws for the Reform of the Financial System, or
the Financial System Reform Act, which was promulgated in June 1998, provided a
framework for the reform of the Japanese financial system by reducing the
barriers between the banking, securities and insurance businesses and enabled
financial institutions to engage in businesses which they were not permitted to
conduct before. The Banking Law, as amended, now permits banks to engage in the
securities business by establishing or otherwise owning domestic and overseas
securities subsidiaries with the approval of the Financial Services Agency, an
agency of the Cabinet

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Office. We expect a further increase in competition among financial
institutions in these new areas of permissible activities.

In terms of new market entrants, other financial institutions, such as Orix
Corporation, and non-financial companies, such as Sony Corporation and
Ito-Yokado Co., Ltd., have also begun to offer various banking services, often
through non-traditional distribution channels. Also, in recent years, various
large foreign financial institutions have significantly expanded their presence
in the Japanese domestic market. Citigroup, for example, has expanded its
banking activities and moved aggressively to provide investment banking and
other financial services, including retail services.

In the corporate banking sector, the principal effect of these reforms has been
the increase in competition as two structural features of Japan's highly
specialized and segmented financial system have eroded:

..   the separation of banking and securities businesses in Japan; and

..   the distinctions among the permissible activities of Japan's three
    principal types of private banking institutions.

For a discussion of the three principal types of private banking institutions,
see "--The Japanese Financial System." In addition, in recent years, Japanese
corporations are increasingly raising funds by accessing the capital markets,
both within Japan and overseas, resulting in a decline in demand for loan
financing. Furthermore, as foreign exchange controls have been generally
eliminated, our customers can now have direct access to foreign financial
institutions, with which we must also compete.

In the consumer banking sector, the deregulation of interest rates on yen
deposits and other factors have enabled our bank subsidiaries to offer
customers an increasingly attractive and diversified range of products. For
example, banks may now sell investment trusts and some types of insurance
products, with the possibility of expanding to additional types of insurance
products in the future. We face competition in this sector from other private
financial institutions as well as from Japan Post, a government-run public
services corporation established on April 1, 2003, which was formerly known as
the Postal Service Agency and which is the world's largest holder of deposits.
Recently, competition has also increased due to the development of new products
and distribution channels. For example, Japanese banks have started competing
with one another by developing innovative proprietary computer technologies
that allow them to deliver basic banking services in a more efficient manner
and to create sophisticated new products in response to customer demand.

The trust assets business is a promising growth area that is competitive and
becoming more so because of changes in the industry. In addition, there is
growing corporate demand for change in the trust regulatory environment, such
as reform of the pension system and related accounting regulations under
Japanese GAAP. However, competition may increase in the future as regulatory
barriers to entry are lowered. Currently, the Japanese Diet is considering
legislation proposing to expand the types of property that can be entrusted, to
allow non-financial companies to conduct trust business and to allow a new type
of registration to conduct only the administration type trust business. If
these changes are implemented, the trust business will expand but at the same
time there will be more competition.

Integration. Another major reason for heightened competition in Japan is the
integration and reorganization of Japanese financial institutions. In 1998,
amendments were made to the Banking Law to allow the establishment of bank
holding companies, and this development together with various factors, such as
the decline of institutional strength caused by the bad loan crisis and
intensifying global competition, resulted in a number of integrations involving
major banks in recent years. In September 2000, The Dai-Ichi Kangyo Bank,
Limited, The Fuji Bank, Limited and The Industrial Bank of Japan, Limited
jointly established a holding company, Mizuho Holdings, Inc., to own the three
banks. In April 2002, these three banks were reorganized into two banks--Mizuho
Bank, Ltd. and Mizuho Corporate Bank, Ltd. In April 2001, The Sumitomo Bank,
Limited and The Sakura Bank, Limited were merged into Sumitomo Mitsui Banking
Corporation. In April 2001, The Sanwa

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Bank, Limited, The Tokai Bank, Limited and The Toyo Trust and Banking Company,
Limited jointly established a holding company, UFJ Holdings, to own the three
banks. In January 2002, the three banks were reorganized into two banks, UFJ
Bank and UFJ Trust Bank Limited. In December 2001, The Daiwa Bank, Ltd. and two
regional banks established Daiwa Bank Holdings Inc., which in March 2002
consolidated with Asahi Bank, Ltd. and changed its corporate name to Resona
Holdings, Inc. in October 2002. For information on the injection of public
funds into Resona Bank, Ltd., a subsidiary bank of Resona Holdings, Inc., see
"--Supervision and Regulation--Japan--Deposit Insurance and Government
Investment in Financial Institutions."

Foreign

In the United States, we face substantial competition in all aspects of our
business. We face competition from other large U.S. and foreign-owned
money-center banks, as well as from similar institutions that provide financial
services. Through Union Bank of California, we compete principally with U.S.
and foreign-owned money-center and regional banks, thrift institutions,
insurance companies, asset management companies, investment advisory companies,
consumer finance companies, credit unions and other financial institutions.

In other international markets, we face competition from commercial banks and
similar financial institutions, particularly major international banks and the
leading domestic banks in the local financial markets in which we conduct
business.

The Japanese Financial System

Japanese financial institutions may be categorized into three types:

..   the central bank, namely the Bank of Japan;

..   private banking institutions; and

..   government financial institutions.

The Bank of Japan

The Bank of Japan's role is to maintain price stability and the stability of
the financial system to ensure a solid foundation for sound economic
development.

Private Banking Institutions

Private banking institutions in Japan are commonly classified into three
categories (the following numbers are based on currently available information
published by the Financial Services Agency) as of June 11, 2004:

..   ordinary banks (128 ordinary banks and 72 foreign commercial banks with
    ordinary banking operations);

..   trust banks (26 trust banks, including 8 Japanese subsidiaries of foreign
    financial institutions); and

..   long-term credit banks (one long-term credit bank).

Ordinary banks in turn are classified as city banks, of which there are six,
including us, and regional banks, of which there are 114. In general, the
operations of ordinary banks correspond to commercial banking operations in the
United States. City banks and regional banks are distinguished based on head
office location as well as the size and scope of their operations.

The city banks are generally considered to constitute the largest and most
influential group of banks in Japan. Generally, these banks are based in large
cities, such as Tokyo and Osaka, and operate nationally through networks of
branch offices. City banks have traditionally emphasized their business with
large corporate clients, including the major industrial companies in Japan.
However, in light of deregulation and other competitive

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factors, many of these banks, including us, in recent years have increased
their emphasis on other markets, such as small and medium-sized companies and
retail banking.

With some exceptions, the regional banks tend to be much smaller in terms of
total assets than the city banks. Each of the regional banks is based in one of
the Japanese prefectures and extends its operations into neighboring
prefectures. Their clients are mostly regional enterprises and local public
utilities, although the regional banks also lend to large corporations. In line
with the recent trend among financial institutions toward mergers or business
tie-ups, various regional banks have announced or are currently negotiating or
pursuing integration transactions, in many cases in order to be able to
undertake the huge investments required in information technology.

Trust banks, including Mitsubishi Trust Bank, provide various trust services
relating to money trusts, pension trusts and investment trusts and offer other
services relating to real estate, stock transfer agency and testamentary
services as well as banking services.

Long-term credit banks are engaged primarily in providing long-term loans to
Japanese industries, principally with funds obtained from the issue of
debentures.

In recent years, almost all of the city banks have consolidated with other city
banks and also, in some cases, with trust banks or long-term credit banks.
Integration among these banks was achieved, in most cases, through the use of a
bank holding company as discussed in "--Competition--Japan--Integration" and
"--Supervision and Regulation--Japan--Bank Holding Company Regulations."

In addition to ordinary banks, trust banks and long-term credit banks, other
private financial institutions in Japan, including shinkin banks or credit
associations, and credit cooperatives, are engaged primarily in making loans to
small businesses and individuals.

Government Financial Institutions

Since World War II, a number of government financial institutions have been
established. These corporations are wholly owned by the government and operate
under its supervision. Their funds are provided mainly from government sources.

Among them are the following:

..   The Development Bank of Japan, whose purpose is to contribute to the
    economic development of Japan by extending long-term loans, mainly to
    primary and secondary sector industries;

..   Japan Bank for International Cooperation, whose purpose is to supplement
    and encourage the private financing of exports, imports, overseas
    investments and overseas economic cooperation;

..   Japan Finance Corporation for Small Business, The Government Housing Loan
    Corporation and The Agriculture, Forestry and Fisheries Finance
    Corporation, the purpose of each of which is to supplement private
    financing in its relevant field of activity; and

..   The Postal Service Agency, which was reorganized in April 2003 into Japan
    Post, a government-run public services corporation.

In April 2004, the Tokyo metropolitan government acquired the Japanese
subsidiary of a foreign trust bank and relaunched it as New Bank Tokyo. Under
the Tokyo metropolitan government's plan, New Bank Tokyo is expected to focus
on loans and guarantees for small and medium-sized businesses, as well as
tie-ups with various non-financial businesses. The new bank is scheduled to
begin operations starting April 2005.

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Supervision and Regulation

Japan

Supervision. As a result of the deregulation and structural reforms in the
Japanese financial industry, Japanese financial institutions gained the
opportunity to provide a wider range of financial products and options to their
clients as discussed in "--Competition--Japan," while at the same time becoming
subject to stricter control and supervision.

After several reorganizations of Japanese governmental agencies, the Financial
Services Agency was established as an agency of the Cabinet Office in 1998. It
is responsible for supervising and inspecting financial institutions, making
policy for the overall Japanese financial system and conducting insolvency
proceedings with respect to financial institutions. The Bank of Japan, as the
central bank for financial institutions, conducts "on-site inspections," in
which its staff visits financial institutions and inspects the assets and risk
management systems of those institutions.

The Banking Law. Among various acts that regulate financial institutions, the
Banking Law and its subordinated orders and ordinances are regarded as the
fundamental law for ordinary banks and other private financial institutions.
The Banking Law addresses bank holding companies, capital adequacy, inspections
and reporting, as well as the scope of business activities, disclosure,
accounting, limitation on granting credit and standards for arm's length
transactions.

Bank holding company regulations. In December 1997, the Anti-Monopoly Law was
amended to generally permit the creation and existence of holding companies,
which had been previously prohibited, except in circumstances in which the
existence of a holding company would result in an excessive concentration of
economic power. Additional legislative measures relating to holding companies
of certain types of financial institutions, such as banks, trust banks and
securities companies, were also proposed around this time and they ultimately
became effective in March 1998. In connection with those legislative measures
and amendments, in December 1997, the Fair Trade Commission amended the
guidelines under the Anti-Monopoly Law to relax the standards for approval of a
financial institution's stockholdings of more than 5% in another company,
thereby permitting a financial institution to acquire interests in other
financial institutions.

A bank holding company is prohibited from carrying on any business other than
the management of its subsidiaries and other incidental businesses. A bank
holding company may have any of the following as a subsidiary: a bank
(including a trust bank and a long-term credit bank), a securities company, an
insurance company or a foreign subsidiary that is engaged in the banking,
securities or insurance business. In addition, a bank holding company may have
as a subsidiary any company that is engaged in a business relating or
incidental to the businesses of the companies mentioned above, such as a credit
card company, a leasing company or an investment advisory company. Companies
that cultivate new business fields may also become the subsidiary of a bank
holding company.

Capital adequacy. The capital adequacy guidelines adopted by the Financial
Services Agency that are applicable to Japanese bank holding companies and
banks with international operations closely follow the risk-weighted approach
proposed by the Basel Committee on Banking Supervision of the Bank for
International Settlements, and are intended to further strengthen the soundness
and stability of Japanese banks.

In addition to credit risks, the guidelines regulate market risks. Market risk
is defined as the risk of losses in on- and off-balance-sheet positions arising
from movements in market prices. The risks subject to these guidelines are:

..   the risks pertaining to interest rate-related instruments and equities in
    the trading book; and

..   foreign exchange risks and commodities risks of the bank.

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Under the risk-based capital framework for credit risk purposes of the capital
adequacy guidelines, on-balance-sheet assets and off-balance-sheet exposures
are assessed according to broad categories of relative risk, based primarily on
the credit risk of the counterparty and country transfer risk. Five categories
of risk weights (0%, 10%, 20%, 50%, 100%) are applied to the different types of
balance sheet assets. Off-balance-sheet exposures are taken into account by
applying different categories of "credit conversion factors" to arrive at
credit-equivalent amounts, which are then weighted in the same manner as
on-balance-sheet assets involving similar counterparties, except that the
maximum risk weight is 50% for exposures relating to foreign exchange, interest
rate and other derivative contracts.

With regard to capital, the capital adequacy guidelines are in accordance with
the standards of the Bank for International Settlement for a target minimum
standard ratio of capital to modified risk-weighted assets of 8.0%. Modified
risk-weighted assets is the sum of risk-weighted assets compiled for credit
risk purposes and market risks multiplied by 12.5. The capital adequacy
guidelines place considerable emphasis on tangible common stockholders' equity
as the core element of the capital base, with appropriate recognition of other
components of capital.

Capital is classified into three tiers, referred to as Tier I, Tier II and Tier
III. Tier I capital generally consists of stockholders' equity items, including
common stock, preferred stock, capital surplus, retained earnings (which
includes deferred tax assets) and minority interests, but recorded goodwill and
other items, such as treasury stock, are deducted from Tier I capital. Tier II
capital generally consists of:

..   general reserves for credit losses, subject to a limit of 1.25% of modified
    risk-weighted assets;

..   45% of the unrealized gains on investment securities available for sale;

..   45% of the land revaluation excess;

..   the balance of perpetual subordinated debt; and

..   the balance of subordinated term debt with an original maturity of over
    five years up to 50% of Tier I capital.

Tier III capital generally consists of short-term subordinated debt with an
original maturity of at least two years and which is subject to a "lock-in"
provision, which stipulates that neither interest nor principal may be paid if
such payment would cause the bank's overall capital amount to be less than its
minimum capital requirement. At least 50% of the minimum capital requirements
must be maintained in the form of Tier I capital.

Several regulatory changes have been proposed with respect to the calculation
of capital ratios. In particular, the Financial System Council of the Financial
Services Agency is discussing the adoption of rules limiting the amount of
deferred tax assets that may be included in the calculation of Tier I and/or
total regulatory capital.

Inspection and reporting. By evaluating banks' systems of self-assessment,
auditing their accounts and reviewing their compliance with laws and
regulations, the Financial Services Agency monitors the financial soundness of
banks, including the status and performance of their control systems for
business activities. The inspection of banks is performed pursuant to a
Financial Inspection Manual published by the Financial Services Agency with a
view to emphasizing (i) each bank's self-assessment rather than the advice of
the governmental authority and (ii) risk management made by each bank instead
of a simple assessment of its assets. In recent years, the Financial Services
Agency has continuously conducted special inspections of major banks in Japan
regarding the grading and levels of write-offs and provisioning of some of
their borrowers.

The Financial Services Agency, if necessary in order to secure the sound and
appropriate operation of a bank's business, may request the submission of
reports or materials from, or conduct an on-site inspection of, the bank and/or
the bank holding company which holds the bank. If a bank's capital adequacy
ratio falls below a specified level, the Financial Services Agency may request
such bank to submit an improvement program and may restrict or suspend a bank's
operation when it determines that such action is necessary.

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Under the amendments to the Banking Law and its subordinated orders and
ordinances, which became effective as of April 1, 2002, a person who desires to
hold 20% or, in exceptional cases 15%, or more of the voting rights of a bank
holding company or a bank is required to obtain prior approval from the Prime
Minister. In addition, the Prime Minister may request the submission of reports
or materials from, or conduct an inspection of, the person who holds 20% or
15%, as the case may be, or more of the voting rights of a bank holding company
or a bank if necessary in order to ensure the appropriate business operation of
such bank.

Furthermore, any person who becomes a holder of more than 5% of the voting
rights of a bank holding company or bank must report its ownership of voting
rights to the Director of the relevant local finance bureau within five
business days. In addition, any subsequent change of 1% or more in any
previously reported holding or any change in material matters set out in
reports previously filed must be reported, with some exceptions.

The Bank of Japan also conducts inspections of banks similar to those
undertaken by the Financial Services Agency. The amended Bank of Japan Law
provides that the Bank of Japan and financial institutions may agree as to the
form of inspection to be conducted by the Bank of Japan.

Laws limiting shareholdings of banks. The provisions of the Anti-Monopoly Law
that prohibit a bank from holding more than 5% of another company's voting
rights do not apply to a bank holding company. However, the Banking Law
prohibits a bank holding company and its subsidiaries from holding, on an
aggregated basis, more than 15% of the voting rights of companies other than
those which can legally become subsidiaries of bank holding companies.

In November 2001, a law which imposes a limitation on a bank's shareholding of
up to the amount equivalent to its Tier I capital was enacted. This limitation
was scheduled to become effective in September 2004, but the effective date has
been postponed to September 2006. To assist banks in complying with this
limitation while mitigating the adverse impact on the stock market, the Banks'
Shareholdings Purchase Corporation was established through the contributions of
128 financial institutions to acquire stocks from banks at market prices. The
lifespan of the Banks' Shareholdings Purchase Corporation was extended to March
31, 2017.

In October 2002, the Policy Board of the Bank of Japan issued guidelines for
the Bank of Japan's purchase of listed stocks from commercial banks whose
aggregate value of stockholdings exceed their Tier I capital. The Bank of Japan
has adopted this policy for the purpose of assisting commercial banks in
reducing the size of their share portfolios without materially adversely
affecting prevailing market prices. Under the guidelines, which were revised in
March 2003, the Bank of Japan will acquire up to (Yen)3 trillion of stock from
the portfolios of commercial banks at prevailing market prices and not sell the
acquired securities until after September 2007.

The Securities and Exchange Law. Article 65 of the Securities and Exchange Law
of Japan generally prohibits a bank from engaging in the securities business.
Under this law, banks, including us and Mitsubishi Trust Bank, may not engage
in the securities business except for limited activities such as dealing in,
underwriting and acting as broker for, Japanese governmental bonds, Japanese
local government bonds and Japanese government guaranteed bonds, and selling
Japanese and foreign investment trust certificates. A recent deregulation of
the securities business has clarified that banks may engage in market-inducting
businesses such as providing advice regarding public offerings or listings and
that the Japanese government will allow banks with appropriate firewalls to
provide securities intermediary services.

In general, the restrictions of the Securities and Exchange Law do not extend
directly to the subsidiaries of banks located outside Japan, which engage in
the securities business mainly in connection with capital-raising by Japanese
companies outside of Japan.

Despite the general prohibition under Article 65, the Financial System Reform
Act allows banks, trust banks, securities companies and insurance companies to
engage in the businesses of other financial sectors through their subsidiaries
in Japan.

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Furthermore, banks' securities subsidiaries in Japan are now permitted to
engage in the underwriting and brokerage of not only bonds, but also equity
securities. This has enabled the securities subsidiaries of banks to offer
various securities-related services to their customers.

In addition, Mitsubishi Tokyo Financial Group, Inc. and some of its
subsidiaries are required to file with the Director of the Kanto Local Finance
Bureau of the Ministry of Finance a securities report for each fiscal period
supplemented by semi-annual and extraordinary reports pursuant to the
Securities and Exchange Law.

Anti-money laundering laws. Under the Law for Punishment of Organized Crimes
and Regulation of Criminal Profits, banks and other financial institutions are
required to report to the competent minister, in the case of banks, the
Commissioner of the Financial Services Agency, any assets which they receive
while conducting their businesses that are suspected of being illicit profits
from criminal activity.

Law concerning trust business conducted by financial institutions. Under the
Trust Business Law, joint stock companies that are licensed by the Prime
Minister as trust companies are allowed to conduct trust business. In addition,
under the Law Concerning Concurrent Operation for Trust Business by Financial
Institutions, banks and other financial institutions, as permitted by the Prime
Minister, are able to conduct trust business. Currently, the Japanese Diet is
considering legislation proposing to expand the types of property that can be
entrusted, to allow non-financial companies to conduct trust business and to
allow a new type of registration to conduct only the administration type trust
business.

Deposit insurance system and government investment in financial institutions.
The Deposit Insurance Law is intended to protect depositors if a financial
institution fails to meet its obligations. The Deposit Insurance Corporation
was established in accordance with that law.

City banks, including us, regional banks, trust banks, including Mitsubishi
Trust Bank, long-term credit banks and various other credit institutions
participate in the deposit insurance system on a compulsory basis.

Under the Deposit Insurance Law, the maximum amount of protection is (Yen)10
million per customer within one bank. However, the deposits in some accounts
such as current accounts and ordinary accounts are fully protected without a
maximum amount limitation until the end of March 2005. From April 1, 2005, all
deposits will be subject to the (Yen)10 million cap, which is currently
applicable only to time deposits, except for non-interest bearing deposits that
are redeemable on demand and used by the depositor primarily for payment and
settlement functions. Currently, the Deposit Insurance Corporation charges
insurance premiums equal to 0.09% on the deposits in current accounts, ordinary
accounts and other similar accounts, which are fully protected as mentioned
above, and premiums equal to 0.08% on the deposits in other accounts.

Since 1998, the failure of a number of large-scale financial institutions has
led to the introduction of various measures with a view to stabilize Japan's
financial system, including financial support from the national budget.

The Law Concerning Emergency Measures for Revitalization of Financial Function,
or the Financial Revitalization Law, enacted in October 1998, provides for (i)
temporary national control of a failed financial institution, (ii) the dispatch
of a financial resolution administrator to the failed financial institution,
and (iii) the establishment of a bridge bank which takes over the business of
the failed financial institution on a temporary basis.

The Law Concerning Emergency Measures for Early Strengthening of Financial
Function, or the Financial Function Early Strengthening Law, also enacted in
October 1998, provided for government funds to be made available to financial
institutions "prior to failure" as well as to financial institutions with
"sound" management, to increase the capital ratio of such financial
institutions and to strengthen their function as financial market
intermediaries. The availability of new funds for this purpose ended on March
31, 2001. Capital injections made under the Financial Function Early
Strengthening Law amounted to approximately (Yen)10 trillion.

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Starting in April 2001, amendments to the Deposit Insurance Law established a
new framework which enables the Deposit Insurance Corporation to inject capital
into a bank if the Prime Minister recognizes it must do so to guard against
financial systemic risk. In May 2003, Resona Bank, Ltd., a subsidiary bank of
Resona Holdings, Inc., was recognized by the Prime Minister to be in need of a
subscription of shares and other measures to expand its capital. Such
recognition was made in accordance with Article 102, Section 1 of the Deposit
Insurance Law. In response to such recognition, Resona Bank, Ltd. applied for
and received an injection of public funds in the total amount of (Yen)1.96
trillion.

Personal Information Protection Law. With regards to protection of personal
information, the new Personal Information Protection Law will become fully
effective on April 1, 2005 and will be applicable to us. Among other matters,
the law requires us to limit the use of personal information to its stated
purpose and to properly manage the personal information in our possession, and
forbids us from providing personal information to third parties without
consent. If we violate certain provisions of the law , the Financial Services
Agency may advise or order us to take proper action. Furthermore, stricter
rules than the standards stated in the law may be introduced for financial
institutions in the near future.

United States

As a result of our operations in the United States, we are subject to extensive
U.S. federal and state supervision and regulation.

Overall supervision and regulation. We are subject to supervision, regulation
and examination with respect to our U.S. operations by the Board of Governors
of the Federal Reserve System, or the Federal Reserve Board, pursuant to the
U.S. Bank Holding Company Act of 1956, as amended, or the BHCA, and the
International Banking Act of 1978, as amended, or the IBA, because we are a
bank holding company and a foreign banking organization, respectively, as
defined pursuant to those statutes.

The Federal Reserve Board functions as our "umbrella" regulator under
amendments to the BHCA effected by the Gramm-Leach-Bliley Act of 1999, which
among other things:

..   prohibited further expansion of activities in which bank holding companies,
    acting directly or through nonbank subsidiaries, may engage;

..   authorized qualifying bank holding companies to opt to become "financial
    holding companies," and thereby acquire the authority to engage in an
    expanded list of activities, including merchant banking, insurance
    underwriting and a full range of securities activities; and

..   modified the role of the Federal Reserve Board by specifying new
    relationships between the Federal Reserve Board and the functional
    regulators of nonbank subsidiaries of both bank holding companies and
    financial holding companies.

We have not elected to become a financial holding company.

The BHCA generally prohibits each of a bank holding company and a foreign
banking organization that maintains branches or agencies in the United States
from, directly or indirectly, acquiring more than 5% of the voting shares of
any company engaged in nonbanking activities in the United States unless the
bank holding company or foreign banking organization has elected to become a
financial holding company, as discussed above, or the Federal Reserve Board has
determined, by order or regulation, that such activities are so closely related
to banking as to be a proper incident thereto and has granted its approval to
the bank holding company or foreign banking organization for such an
acquisition. The BHCA also requires a bank holding company or foreign banking
organization that maintains branches or agencies in the United States to obtain
the prior approval of an appropriate federal banking authority before
acquiring, directly or indirectly, the ownership of more than 5% of the voting
shares or control of any U.S. bank or bank holding company. In addition, under
the BHCA, a

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U.S. bank or a U.S. branch or agency of a foreign bank is prohibited from
engaging in various tying arrangements involving it or its affiliates in
connection with any extension of credit, sale or lease of any property or
provision of any services.

U.S. branches and agencies of subsidiary Japanese banks. Under the authority of
the IBA, we operate six branches, two agencies and four representative offices
in the United States. We operate branches in Los Angeles and San Francisco,
California; Chicago, Illinois; New York, New York; Portland, Oregon; and
Seattle, Washington; agencies in Atlanta, Georgia and Houston, Texas; and
representative offices in Washington, D.C; Minneapolis, Minnesota; Dallas,
Texas; and Jersey City, New Jersey.

The IBA provides, among other things, that the Federal Reserve Board may
examine U.S. branches and agencies of foreign banks, and that each such branch
and agency shall be subject to on-site examination by the appropriate federal
or state bank supervisor as frequently as would a U.S. bank. The IBA also
provides that if the Federal Reserve Board determines that a foreign bank is
not subject to comprehensive supervision or regulation on a consolidated basis
by the appropriate authorities in its home country, or if there is reasonable
cause to believe that the foreign bank or its affiliate has committed a
violation of law or engaged in an unsafe or unsound banking practice in the
United States, the Federal Reserve Board may order the foreign bank to
terminate activities conducted at a branch or agency in the United States.

U.S. branches and agencies of foreign banks must be licensed, and are also
supervised and regulated, by a state or by the Office of the Comptroller of the
Currency, or the OCC, the federal regulator of national banks. All of our
branches and agencies in the United States are state-licensed. Under U.S.
federal banking laws, state-licensed branches and agencies of foreign banks may
engage only in activities that would be permissible for their
federally-licensed counterparts, unless the Federal Reserve Board determines
that the additional activity is consistent with sound practices. U.S. federal
banking laws also subject state-licensed branches and agencies to the
single-borrower lending limits that apply to federal branches and agencies,
which generally are the same as the lending limits applicable to national
banks, but are based on the capital of the entire foreign bank.

As an example of state supervision, our branch in New York is licensed by the
New York State Superintendent of Banks, or the Superintendent, pursuant to the
New York Banking Law. Under the New York Banking Law and the Superintendent's
Regulations, we must maintain with banks in the State of New York eligible
assets as defined and in amounts determined by the Superintendent. Our New York
branch must also submit written reports concerning its assets and liabilities
and other matters, to the extent required by the Superintendent, and is
examined at periodic intervals by the New York State Banking Department. In
addition, the Superintendent is authorized to take possession of our business
and property located in New York whenever events specified in the New York
Banking Law occur.

U.S. subsidiary banks. We own and control two U.S. banks:

..   Bank of Tokyo-Mitsubishi Trust Company, New York, New York (held directly
    by us, a registered bank holding company), and

..   Union Bank of California, N.A. (held indirectly through our subsidiary,
    UnionBanCal Corporation, a registered bank holding company).

Bank of Tokyo-Mitsubishi Trust Company is chartered by the State of New York
and is subject to the supervision, examination and regulatory authority of the
Superintendent pursuant to the New York Banking Law. Union Bank of California,
N.A., is a national bank subject to the supervision, examination and regulatory
authority of the OCC pursuant to the National Bank Act.

The Federal Deposit Insurance Corporation, or the FDIC, is the primary federal
agency responsible for the supervision, examination and regulation of Bank of
Tokyo-Mitsubishi Trust Company, and insures the deposits

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<PAGE>

of both of our U.S. subsidiary banks. In the event of the failure of an
FDIC-insured bank, the FDIC is virtually certain to be appointed as receiver,
and would resolve the failure under provisions of the Federal Deposit Insurance
Act.

An FDIC-insured institution that is affiliated with a failed or failing
FDIC-insured institution can be required to indemnify the FDIC for losses
resulting from the insolvency of the failed institution, even if this causes
the affiliated institution also to become insolvent. In the liquidation or
other resolution of a failed FDIC-insured depository institution, deposits in
its U.S. offices and other claims for administrative expenses and employee
compensation are afforded priority over other general unsecured claims,
including deposits in offices outside the United States, non-deposit claims in
all offices and claims of a parent company. Moreover, under long-standing
Federal Reserve Board policy, a bank holding company is expected to act as a
source of financial strength for its subsidiary banks and to commit resources
to support such banks.

Bank capital requirements and capital distributions. Our U.S. bank subsidiaries
and UnionBanCal Corporation, our U.S. subsidiary bank holding company, are
subject to applicable risk-based and leverage capital guidelines issued by U.S.
regulators for banks and bank holding companies. Both of our U.S. subsidiary
banks are "well capitalized" under those guidelines as they apply to banks, and
our U.S. subsidiary bank holding company exceeds all minimum regulatory capital
requirements applicable to domestic bank holding companies. The Federal Deposit
Insurance Corporation Improvement Act of 1991, or FDICIA, provides, among other
things, for expanded regulation of insured depository institutions, including
banks, and their parent holding companies. As required by FDICIA, the federal
banking agencies have established five capital tiers ranging from "well
capitalized" to "critically undercapitalized" for insured depository
institutions. As an institution's capital position deteriorates, the federal
banking regulators may take progressively stronger actions, such as further
restricting affiliate transactions, activities, asset growth or interest
payments. In addition, FDICIA generally prohibits an insured depository
institution from making capital distributions, including the payment of
dividends, or the payment of any management fee to its holding company, if the
insured depository institution would subsequently become undercapitalized.

The availability of dividends from insured depository institutions in the
United States is limited by various other statutes and regulations. The
National Bank Act and other federal laws prohibit the payment of dividends by a
national bank under various circumstances and limit the amount a national bank
can pay without the prior approval of the OCC. In addition, state-chartered
banking institutions are subject to dividend limitations imposed by applicable
federal and state laws.

Other regulated U.S. subsidiaries. Our nonbank subsidiaries that engage in
securities or futures-related activities in the United States are regulated by
appropriate functional regulators, such as the SEC, the Commodities Futures
Trading Commission, any self-regulatory organizations of which they are
members, and the appropriate state regulatory agencies. These nonbank
subsidiaries are required to meet separate minimum capital standards as imposed
by those regulatory authorities.

The Gramm-Leach-Bliley Act removed almost all of the pre-existing statutory
barriers to affiliations between commercial banks and securities firms by
repealing Sections 20 and 32 of the Glass-Steagall Act. At the same time,
however, the so-called "push-out" provisions of the Gramm-Leach-Bliley Act
narrowed the exclusion of banks, including the U.S. branches of foreign banks,
from the definitions of "broker" and "dealer" under the Securities Exchange Act
of 1934, potentially requiring all such banks to transfer some activities to
affiliated broker-dealers. The SEC has issued rules regarding the push-out of
"dealer" functions that became effective on September 30, 2003. On June 30,
2004, the SEC issued its proposed Regulation B, which would govern the push-out
requirements for "broker" functions. The SEC has proposed to adopt Regulation B
as a final rule in January 2005, with full compliance required approximately
one year thereafter, although the final form of Regulation B and the date of
its effectiveness are still subject to change. At this time, we do not believe
that these push-out rules as adopted or as currently proposed will have a
significant impact on our business as currently conducted in the United States.

                                      36

<PAGE>

USA PATRIOT Act. The USA PATRIOT Act of 2001 substantially broadened the scope
of U.S. anti-money laundering laws and regulations by imposing significant new
compliance and due diligence obligations, creating new crimes and penalties and
expanding the extraterritorial jurisdiction of the United States. Failure of a
financial institution to comply with the USA PATRIOT Act's requirements could
have serious legal and reputational consequences for the institution.

C. Organizational Structure

The following chart presents our basic corporate structure:

                                  [FLOW CHART]



Mitsubishi Tokyo Financial Group, Inc. is the sole shareholder of us and
Mitsubishi Trust Bank. The other subsidiaries and affiliated companies of
Mitsubishi Tokyo Financial Group, Inc. are held indirectly under us and
Mitsubishi Trust Bank. In April 2004, Mitsubishi Tokyo Financial Group, Inc.
acquired a 13% ownership interest in ACOM and following this transaction,
Mitsubishi Tokyo Financial Group, Inc. and its subsidiaries hold shares
representing 15% of the voting rights in ACOM.

For information on the proposed management integration between Mitsubishi Tokyo
Financial Group, Inc. and its subsidiaries, including us, and UFJ Holdings and
its subsidiaries, see "Item 5.A. Operating and Financial Review and
Prospects--Recent Developments--Basic Agreement Regarding the Management
Integration of Mitsubishi Tokyo Financial Group and the UFJ Group."

Set forth below is a list of our significant subsidiaries at March 31, 2004.

<TABLE>
<CAPTION>
                                                                      Proportion of  Proportion
                                                        Country of      ownership    of voting
Name                                                   incorporation  interest (%)  interest (%)
----                                                   -------------- ------------- ------------
<S>                                                    <C>            <C>           <C>
Mitsubishi Securities Co., Ltd........................     Japan          54.11         53.76
DC Card Co., Ltd......................................     Japan          41.30         41.30
Tokyo-Mitsubishi Asset Management Ltd.................     Japan          51.39         51.39
Mitsubishi Tokyo Wealth Management Securities, Ltd....     Japan         100.00        100.00
The Diamond Factors Limited...........................     Japan          75.83         75.83
The Diamond Home Credit Company Limited...............     Japan          99.66         99.66
BOT Lease Co., Ltd....................................     Japan          16.06         16.06
UnionBanCal Corporation............................... United States      62.20         62.20
Union Bank of California, N.A......................... United States      62.20         62.20
Bank of Tokyo-Mitsubishi Trust Company................ United States     100.00        100.00
Tokyo-Mitsubishi International plc/(1)/............... United Kingdom    100.00        100.00
Mitsubishi Tokyo Wealth Management (Switzerland), Ltd.  Switzerland       90.00         90.00
</TABLE>
--------
(1) On July 5, 2004, Tokyo-Mitsubishi International plc changed its name to
    "Mitsubishi Securities International plc."

                                      37

<PAGE>

D. Property, Plants and Equipment

The following table presents our premises and equipment at cost as of March 31,
2003 and 2004:

<TABLE>
<CAPTION>
                                                 At March 31
                                        -----------------------------
                                             2003           2004
                                        -------------- --------------
                                                (in millions)
          <S>                           <C>            <C>
          Land......................... (Yen)  112,808 (Yen)   96,802
          Buildings....................        320,808        319,088
          Equipment and furniture......        435,973        394,419
          Leasehold improvements.......        215,822        205,538
          Construction in progress.....         12,057          4,136
                                        -------------- --------------
             Total.....................      1,097,468      1,019,983
          Less accumulated depreciation        611,903        585,460
                                        -------------- --------------
          Premises and equipment--net.. (Yen)  485,565 (Yen)  434,523
                                        ============== ==============
</TABLE>

Our head office is located at 7-1, Marunouchi 2-chome, Chiyoda-ku, Tokyo, and
comprises 1,326,000 square meters of office space. At March 31, 2004, we
conducted our banking operations either in our owned premises or in leased
properties.

The following table presents the areas and book values of our material office
and other properties at March 31, 2004:

<TABLE>
<CAPTION>
                                       Area               Book value
                           ----------------------------- -------------
                           (in thousands of square feet) (in millions)
          <S>              <C>                           <C>
          Owned land......             7,443             (Yen) 96,802
          Leased land.....             1,151                       --
          Owned buildings.            13,980                  133,708
          Leased buildings             7,699                       --
</TABLE>

Our owned land and buildings are primarily used by our branches. Most of the
buildings and land owned by us are free from material encumbrances, except as
described below.

In March 1999, we sold a 50% undivided interest in each of our head office land
and building and our main office land and building and, at the same time, we
entered into an agreement to lease back from the buyer the 50% undivided
interests of the buildings sold for a period of seven years. We accounted for
these transactions as financing arrangements.

During the fiscal year ended March 31, 2004, we invested approximately
(Yen)42.6 billion in our subsidiaries primarily for office renovations and
purchases of furniture and equipment.

                                      38

<PAGE>

Item 5. Operating and Financial Review and Prospects.

The following discussion and analysis should be read in conjunction with "Item
3.A. Key Information--Selected Financial Data" and our consolidated financial
statements and related notes included elsewhere in this Annual Report.

<TABLE>
<CAPTION>
                                                                                      Page
Roadmap to Reading the Discussion of Our Operating and Financial Review and Prospects ----
<S>                                                                                   <C>

       A. Operating Results..........................................................  39

        Executive Summary............................................................  39

        Recent Developments..........................................................  40

        Business Environment.........................................................  42

        Critical Accounting Estimates................................................  43

        Accounting Changes...........................................................  47

        Recently Issued Accounting Pronouncements....................................  49

        Results of Operations........................................................  50

        Business Segment Analysis....................................................  61

        Geographic Segment Analysis..................................................  67

       Effect of the Change in Exchange Rates on Foreign Currency Translation........  68

       B. Liquidity and Capital Resources............................................  69.

        Financial Condition..........................................................  69

        Capital Adequacy.............................................................  84

        Off-balance-sheet Arrangements...............................................  87

        Contractual Cash Obligations.................................................  90

        Non-exchange Traded Contracts Accounted for at Fair Value....................  90

       C. Research and Development, Patents and Licenses, etc........................  91.

       D. Trend Information..........................................................  91.

       E. Off-balance-sheet Arrangements.............................................  91.

       F. Tabular Disclosure of Contractual Obligations..............................  91.

       G. Safe Harbor................................................................  91.
</TABLE>

A. Operating Results

Executive Summary

We are a wholly owned subsidiary of Mitsubishi Tokyo Financial Group, Inc. We
engage in a broad range of financial operations, including commercial banking,
investment banking, asset management and securities-related businesses, and
provide related services to individual and corporate customers. The financial
services industry and the global financial markets are influenced by many
unpredictable factors, including economic conditions, monetary policy,
international political events, liquidity in global markets and regulatory
developments. Our operations are significantly affected by external factors,
such as the level and volatility of interest rates, currency exchange rates,
stock and real estate markets and other economic and market conditions. In
addition, we hold a significant number of shares in some of our customers for
strategic purposes, in particular to maintain long-term relationships. These
shareholdings expose us to a risk of losses resulting from a decline in their
market prices. Accordingly, our results of operations may vary significantly
from period to period because of unpredictable events, including unexpected
failures of large corporate borrowers, defaults in emerging markets and market
volatility.

                                      39

<PAGE>

As the Japanese and overseas economies recovered generally in the fiscal year
ended March 31, 2004, we achieved net income of (Yen)537.6 billion, an increase
of 116% compared to the previous fiscal year. Income from continuing operations
before income tax expense and cumulative effect of a change in accounting
principle for the fiscal year ended March 31, 2004 was (Yen)871.8 billion, an
increase of 201% compared to the previous fiscal year. These improvements were
mainly due to a reversal of allowance for credit losses and an increase in
non-interest income.

The reversal of allowance for credit losses was mainly due to an improvement in
our loan portfolio as evidenced by the reduction in our nonperforming loans.
The increase in non-interest income was primarily attributable to an increase
in net foreign exchange gains reflecting the appreciation of the yen against
foreign currencies, and an increase in net investment securities gains mainly
due to the improvement in the Japanese stock market. These increases were
partially offset by a decrease in net trading account profits, primarily due to
the rise in long-term interest rates in Japan.

These favorable changes were partially offset by a decrease in net interest
income primarily due to a decline in the average interest rate spread.

Recent Developments

Basic Agreement Regarding the Management Integration of Mitsubishi Tokyo
Financial Group and the UFJ Group

On August 12, 2004, Mitsubishi Tokyo Financial Group, Inc., UFJ Holdings, we,
UFJ Bank, Mitsubishi Trust Bank, UFJ Trust Bank Limited, Mitsubishi Securities,
and UFJ Tsubasa Securities Co., Ltd., concluded a basic agreement with regard
to the management integration of the holding companies, banks, trust banks and
securities companies of the two groups. The management integration is subject
to the approval of the shareholders and the relevant authorities. The
integration of the two groups' holding companies, banks, trust banks and
securities companies is targeted for completion by October 1, 2005.

The respective merger or other integration ratios for the holding companies,
banks, trust banks and securities companies will be decided on the basis of
forthcoming discussions considering rational assessments, including valuation
reports by outside institutions. The organization, capital, specific
integration procedures and other matters regarding the new holding company, new
bank, new trust bank and new securities company will be decided on the basis of
forthcoming discussions.

On September 17, 2004, Mitsubishi Tokyo Financial Group, Inc. purchased 3.5
billion class E preferred shares issued by UFJ Bank for (Yen)700 billion. This
capital injection to UFJ Bank is part of the proposed management integration
between Mitsubishi Tokyo Financial Group and the UFJ Group as outlined in the
basic agreement between the two groups announced on August 12, 2004. The
preferred shares issued by UFJ Bank are non-voting shares but convertible into
voting preferred shares of UFJ Bank at any time subject to the restrictions in
the separate agreement described below. The investment is based on the
assumption that the management integration of the two groups will proceed, and
is intended to maximize the benefits of the management integration.

On September 10, 2004, Mitsubishi Tokyo Financial Group, Inc., UFJ Holdings and
UFJ Bank also entered into a separate agreement setting forth (1) restrictions
on Mitsubishi Tokyo Financial Group, Inc.'s rights to convert the non-voting
preferred shares into voting preferred shares, (2) restrictions on Mitsubishi
Tokyo Financial Group, Inc.'s ability to transfer the preferred shares, and (3)
Mitsubishi Tokyo Financial Group, Inc.'s put option and UFJ Holdings' call
option relating to the preferred shares.

For more information, see "Item 3.D. Risk Factors--Risks Related to Our
Business--The proposed management integration with UFJ Bank Limited and its
subsidiaries may be delayed, materially altered or abandoned. In addition, we
may have difficulty integrating the operations of UFJ Bank."

                                      40

<PAGE>

Introduction of Mitsubishi Tokyo Financial Group's Integrated Business Groups

Effective April 1, 2004, Mitsubishi Tokyo Financial Group, Inc., together with
we and Mitsubishi Trust Bank, implemented a new integrated business group
system, which combines our operations with Mitsubishi Trust Bank in the
following three areas--Retail, Corporate, and Trust Assets. Although this new
measure did not change the legal entities in Mitsubishi Tokyo Financial Group,
Inc. and its banking subsidiaries including us, it is intended to create more
synergies by making the collaboration between us and Mitsubishi Trust Bank more
effective and efficient.

Since the introduction was made subsequent to March 31, 2004, we did not
reclassify the business segment information for the fiscal years ended March
31, 2002, 2003 and 2004 to reflect this system in this Annual Report. For
further information regarding our integrated business groups, see "Item 4.B.
Business Overview."

Strategic Business and Capital Alliance between Mitsubishi Tokyo Financial
Group and ACOM

Mitsubishi Tokyo Financial Group, Inc., and ACOM, a consumer finance company,
reached an agreement on March 23, 2004 with respect to a strategic business and
capital alliance in retail financial services. The main elements of the
business alliance will be undertaken by ACOM and us. As part of the capital
alliance, Mitsubishi Tokyo Financial Group, Inc. acquired approximately 20.7
million ACOM shares for (Yen)137.9 billion in April 2004. As a consequence of
this acquisition, Mitsubishi Tokyo Financial Group, Inc. and its subsidiaries
own shares representing 15% of the voting rights in ACOM.

Legal Proceedings for Local Taxes

In October 2003, a number of banks, including us, entered into a
settlement-at-court with the Tokyo Metropolitan Government and the Tokyo
Governor and withdrew their complaints regarding the Tokyo Metropolitan
Government's local tax on large banks. The settlement included (a) a revision
of the applicable tax rate to 0.9% from 3.0%, effective retroactive to the date
of the enactment of the local tax in the fiscal year ended March 31, 2001 and
(b) a refund representing the difference between the amount already paid by the
banks and the amount computed based on the newly enacted rate plus accrued
interest. As a result of this settlement, we received an aggregate tax refund
plus accrued interest amounting to (Yen)32.1 billion.

Business Revitalization Plan of Mitsubishi Motors

On May 21, 2004, Mitsubishi Motors Corporation, or Mitsubishi Motors, announced
a business revitalization plan under which it aims to achieve positive ordinary
profit in the fiscal year ending March 2006 through sweeping business reforms.
At the request of Mitsubishi Motors, we, along with Mitsubishi Trust Bank,
Mitsubishi Heavy Industries, Ltd., Mitsubishi Corporation and other
corporations, decided to subscribe to a private placement of preferred shares
with the view to helping Mitsubishi Motors achieve the goals of its business
revitalization plan. As a result, we purchased an aggregate of (Yen)40 billion
of preferred shares and also conducted a debt-for-equity swap relating to
(Yen)90 billion aggregate principal amount of loans previously extended to
Mitsubishi Motors. For further information regarding our transactions with
Mitsubishi Motors, see note 32 to our consolidated financial statements.

Acquisition of Diamond Computer Service by Mitsubishi Tokyo Financial Group,
Inc.

On August 26, 2004, Mitsubishi Tokyo Financial Group, Inc. announced that
Diamond Computer Service, Co. Ltd., currently our equity method investee, will
become its wholly owned subsidiary by December 22, 2004 through a share
exchange. The transaction is subject to approval by Diamond Computer Service's
shareholders, including us, and the relevant authorities.

                                      41

<PAGE>

Further Integration of Investment Banking and Securities Businesses

After the creation of Mitsubishi Securities, we have been consolidating most of
our securities business and various areas of our investment banking business,
such as mergers and acquisitions, derivatives, corporate advisory and
securitization operations that were previously conducted through our investment
banking and asset management business unit, into Mitsubishi Securities.

To further integrate our investment banking and securities businesses, our
securities subsidiaries located in the United States, Hong Kong and Singapore
were transferred to Mitsubishi Securities during the fiscal year ended March
31, 2004.

In addition, Tokyo-Mitsubishi International plc, our securities subsidiary
located in the United Kingdom, was transferred to Mitsubishi Securities in July
2004 and subsequently renamed Mitsubishi Securities International plc.

Planned Transfer to the Japanese Government of the Substitutional Portion of
Employee Pension Fund Liabilities

In June 2003, we submitted to the government an application to transfer the
obligation to pay benefits for future employee services related to the
substitutional portion in defined benefit pension plans established under the
Japanese Welfare Pension Insurance Law, and the application was approved by the
government in August 2003. Since the approval, we have been making pension
insurance payments to the government and the government has assumed the benefit
obligations arising from future employee services. To complete the entire
separation process, in August 2004 we made another application for transfer to
the government of the remaining substitutional portion related to the benefit
obligation for past services. Upon the approval of the second application, we
will transfer to a government agency our remaining substitutional obligation
and related pension plan assets, which amount will be determined pursuant to a
government formula, and in exchange will be released from paying the remaining
substitutional portion of the benefits to our employees. For more detailed
information of the transfer of pension fund liabilities, see "Item 5.B.
Liquidity and Capital Resources--Financial Condition--Severance Indemnities and
Pension Liabilities."

Dissolution of Mortgage Securities Subsidiary

In the fiscal year ended March 31, 2004, we completed the liquidation process
of our domestic mortgage securities subsidiary, The Diamond Mortgage Co., Ltd.
The dissolution was due to the adverse business environment for the domestic
mortgage securities business. For further information regarding our
discontinued operations, see note 2 to our consolidated financial statements.

Business Environment

We engage in a wide range of financial operations, including commercial
banking, investment banking, asset management and securities-related
businesses, and provide related services to individual and corporate customers
around the world. Our results of operations and financial condition are exposed
to changes in various external economic factors, including:

..   General economic conditions;

..   Interest rates;

..   Currency exchange rates; and

..   Stock and real estate prices.

                                      42

<PAGE>

Economic Environment in Japan

The Japanese economy, our primary operating area, recently entered into a
recovery phase mainly due to an increase in exports and capital spending, as
well as improvements in employment and wages. The real gross domestic product
growth rate for the fiscal year ended March 31, 2004 was 3.2%, compared to a
1.2% decline for the fiscal year ended March 31, 2002, and a 1.1% increase for
the fiscal year ended March 31, 2003.

With respect to interest rates, short-term interest rates remained at near zero
percent as the Bank of Japan continued its policy to provide ample liquidity in
the money markets. The yield on 10-year government bonds, used as a benchmark
for long-term interest rates, started in April 2003 at around 0.7%, reached a
record low of around 0.5% in June 2003, and finished in March 2004 at around
1.4%. As of mid-September 2004, the yield was around 1.5%.

There was a significant recovery in stock prices, as exemplified by an
approximately 47% increase in the Nikkei Stock Average, an average of 225 blue
chip stocks listed on the Tokyo Stock Exchange, from (Yen)7,972.71 at March 31,
2003 to (Yen)11,715.39 at March 31, 2004. In addition, the Tokyo Stock Price
Index, or TOPIX, a composite index of all stocks listed on the First Section of
the Tokyo Stock Exchange, rose approximately 50% from 788.00 at March 31, 2003
to 1,179.23 at March 31, 2004. As of mid-September 2004, the Nikkei Stock
Average was around (Yen)11,200, and the TOPIX was around 1,100.

In the foreign exchange markets, the value of the yen against the U.S. dollar
generally appreciated during the fiscal year ended March 31, 2004. See "Item 3.
A. Key Information--Selected Financial Data--Exchange Rate Information" for the
historical noon buying rates of the Federal Reserve Bank of New York.

Land prices in Japan continued to decline during the fiscal year ended March
31, 2004, but the extent of the decline was smaller than the previous fiscal
year. Based on the average government-set official land prices as of January 1,
2004, nationwide residential land prices declined 5.7%, compared to a 5.8%
decline in the previous fiscal year, and nationwide land prices for commercial
properties declined 7.4%, compared to a 8.0% decline in the previous fiscal
year.

The number of corporate bankruptcy filings during the fiscal year ended March
31, 2004 was around 15,000, representing a 17% decline compared to the previous
fiscal year.

International Financial Markets

In the beginning of the fiscal year ended March 31, 2004, the growth of
overseas economies slowed down due to the war in Iraq and the outbreak of the
SARS epidemic. However, overseas economies moved toward recovery later in the
fiscal year, particularly in the United States where a large-scale tax
reduction was implemented, and in the People's Republic of China where domestic
demand continued to increase.

In the United States, the 10-year U.S. treasury note, a benchmark for long-term
interest rates, started at around 3.9% in April 2003 and finished at around
3.8% in March 2004. As of mid-September 2004, the yield was around 4.2%. The
U.S. Federal Reserve decreased its target for the federal funds rate by 25
basis points to 1.00% in June 2003. Subsequent to March 31, 2004, the Federal
Reserve raised its target for the federal funds rate by 25 basis points
respectively in June, August and September 2004 to 1.75%.

In the EU, the European Central Bank decreased its policy rate (refinancing
rate) by 0.50% to 2.00% in June 2003.

Critical Accounting Estimates

Our financial statements are prepared in accordance with US GAAP. Many of the
accounting policies require management to make difficult, complex or subjective
judgments regarding the valuation of assets and liabilities.

                                      43

<PAGE>

The accounting policies are fundamental to understanding our operating and
financial review and prospects. The notes to our consolidated financial
statements provide a summary of our significant accounting policies. The
following is a summary of the critical accounting estimates.

Allowance for Credit Losses

The allowance for credit losses represents management's estimate of probable
losses in our loan portfolio. The evaluation process involves a number of
estimates and judgments. The allowance is based on two principles of
accounting: (1) Statement of Financial Accounting Standards, or SFAS, No. 5,
"Accounting for Contingencies," which requires that losses be accrued when they
are probable of occurring and can be estimated; and (2) SFAS No. 114,
"Accounting by Creditors for Impairment of a Loan" and SFAS No. 118,
"Accounting by Creditors for Impairment of a Loan--Income Recognition and
Disclosures," which require that losses be accrued based on the difference
between the present value of expected future cash flows discounted at the
loan's effective interest rate, the fair value of collateral or the loan's
value that is observable in the secondary market and the loan balance.

Our allowance for credit losses consists of an allocated allowance and an
unallocated allowance. The allocated allowance comprises (a) the allowance for
specifically identified problem loans, (b) the allowance for large groups of
smaller balance homogeneous loans, (c) the allowance for loans exposed to
specific country risk and (d) the formula allowance. Both the allowance for
loans exposed to specific country risk and formula allowance are provided to
performing loans, that are not subject to either the allowance for specifically
identified problem loans or the allowance for large groups of smaller balance
homogeneous loans.

The allowance for loans exposed to specific country risk covers transfer risk
which is not specifically covered by other types of allowance. Each of these
components is determined based upon estimates that can and do change when
actual events occur. The allowance for specifically identified problem loans,
which represent large-balance, non-homogeneous loans that have been
individually determined to be impaired, uses various techniques to arrive at an
estimate of loss. Historical loss information, discounted cash flows, fair
value of collateral and secondary market information are all used to estimate
those losses.

Large groups of smaller balance homogeneous loans are collectively evaluated
for impairment, and the allowance for such loans is established through a
process that begins with estimates of probable losses inherent in the
portfolio, based upon various analyses, including historical delinquency and
credit loss experience.

The allowance for loans exposed to specific country risk is based on an
estimate of probable losses relating to our exposure to countries that we
identify as having a high degree of transfer risk. We use a country risk
grading system that assigns risk ratings to individual countries. To determine
the risk rating, we consider the instability of foreign currency and
difficulties regarding our borrowers' ability to service their debt.

The formula allowance uses a model based on historical losses as an indicator
of future probable losses and as a result could differ from losses incurred in
the future. However, since this history is updated with the most recent loss
information, the differences that might otherwise occur are mitigated.

Our actual losses could be more or less than the estimates. The unallocated
allowance captures losses that are attributable to various economic events,
industry or geographic sectors whose impact on the portfolio have occurred but
have yet to be recognized in the allocated allowance. For further information
regarding our allowance for credit losses, see "Item 5.B. Liquidity and Capital
Resources--Financial Condition--Allowance for Credit Losses, Nonperforming and
Past Due Loans."

In addition to the allowance for credit losses on our loan portfolio, we
maintain an allowance for credit losses on off-balance-sheet credit
instruments, including commitments to extend credit, a variety of guarantees
and standby letters of credit. Such allowance is included in other liabilities.
With regard to the allocated allowance for specifically identified credit
exposure and the allocated formula allowance, we apply the same methodology
that we use in determining the allowance for loan credit losses.

To the extent that actual losses differ from management's estimates, additional
provisions for credit losses may be required that would adversely impact our
operating results and financial condition in future periods.

                                      44

<PAGE>

Impairment of Investment Securities

US GAAP requires the recognition in earnings of an impairment loss on
investment securities for a decline in fair value that is other than temporary.
Determinations of whether a decline is other than temporary often involves
estimating the outcome of future events. Management judgment is required in
determining whether factors exist that indicate that an impairment loss has
been incurred at the balance sheet date. These judgments are based on
subjective as well as objective factors. We conduct a review semi-annually to
identify and evaluate investment securities that have indications of possible
impairment.

Debt and marketable equity securities. In determining whether a decline in fair
value is other than temporary for a particular security, indicators of an
other-than-temporary decline for both debt and marketable equity securities
include the extent of decline in fair value below cost and the length of time
that the decline has continued. If a decline in fair value is 20% or more or a
decline in fair value has continued for six months or more, we generally deem
such decline as an indicator of other-than-temporary decline. We also consider
the financial condition and near-term prospects of issuers primarily based on
the credit standing of the issuers as determined by our credit rating system.

Prior to the fiscal year ended March 31, 2004, we did not take the lengths of
time that a decline continued into consideration with respect to debt
securities because a substantial majority of our investments in debt securities
are in high-grade fixed-rate bonds, including sovereign bonds such as U.S.
treasury bonds, and we generally had the intent to hold such investments for a
period longer than that inherent in cyclical short-term market price
fluctuations due to market interest rate and foreign exchange rate changes.
However, in light of the recent decline in the bond market, which made it
difficult for us to hold debt securities for a period longer than that
necessary for recovery, during the fiscal year ended March 31, 2004, we
determined that the length of period that a decline in fair value continued
should be considered in identifying other-than temporary decline in fair value
of debt securities. The aggregate amount of unrealized losses at March 31, 2004
that we determined to be temporary was (Yen)24,475 million.

The determination of other-than-temporary impairment for certain securities
held by UnionBanCal Corporation, our U.S. subsidiary, which primarily consists
of securities backed by the full faith and credit of the U.S. government and
corporate asset-backed and debt securities, are made on the basis of a cash
flow analysis of securities and/or the ability of UnionBanCal Corporation to
hold such securities to maturity.

Non-marketable equity securities. We consider the credit standing of issuers
and the extent of decline in net assets of issuers to determine whether the
decline is other than temporary. When we determine that the decline is other
than temporary, non-marketable equity securities are written down to our share
of the amount of the issuer's net assets, which approximates fair value.

The markets for equity securities and debt securities are inherently volatile,
and the values of both types of securities have fluctuated significantly in
recent years. Accordingly, our assessment of potential impairment involves
risks and uncertainties depending on the market condition. If we later conclude
that a decline is other than temporary, the impairment loss may significantly
affect our operating results and financial condition in future periods.

Valuation of Deferred Tax Assets

A valuation allowance for deferred tax assets is recognized if, based on the
weight of available evidence, it is more likely than not that some portion or
all of the deferred tax assets will not be realized. All available evidence,
both positive and negative, is considered to determine whether, based on the
weight of that evidence, a valuation allowance is needed. Future realization of
the tax benefit of existing deductible temporary differences or carryforwards
ultimately depends on the existence of sufficient taxable income in future
periods.

                                      45

<PAGE>

In determining a valuation allowance, we perform a review of future taxable
income (exclusive of reversing temporary differences and carryforwards) and
future reversals of existing taxable temporary differences. Due to losses in
recent years and continuing weak economic conditions, the determination of the
valuation allowance involves difficult judgments to estimate future taxable
income.

At March 31, 2004, we had operating loss carryforwards of (Yen)1,299.0 billion.
Future realization of the tax benefit of the carryforwards or existing
deductible temporary differences ultimately depends on the existence of
sufficient taxable income in future periods. Based on our estimates of future
taxable income, we recognized a valuation allowance for a portion of the
operating loss carryforwards.

Because the establishment of the valuation allowance is an inherently uncertain
process involving estimates, currently established allowance may not be
sufficient. If the estimated allowance is not sufficient, we will incur
additional deferred tax expenses, which could materially affect our operating
results and financial condition in future periods.

Accounting for Goodwill

US GAAP requires us to test goodwill for impairment at least annually using a
two-step process that begins with an estimation of the fair value of a
reporting unit of our business, which is to be compared with the carrying
amount of the unit, to identify potential impairment of goodwill. The fair
value of a reporting unit is defined as the amount at which the unit as a whole
could be bought or sold in a current transaction between willing parties. Since
an observable quoted market price for units is not always available, the
estimate of fair value is based on the best information available, including
prices for comparable units and the results of using other valuation techniques
including the present value technique, which requires an estimate of future
cash flows and other assumptions. If the carrying amount of a reporting unit
exceeds its estimated fair value, the second step of the goodwill impairment
test is performed to measure the amount of impairment loss. This test requires
comparison of the implied fair value of the unit's goodwill with the carrying
amount of that goodwill. The estimate of the implied fair value of the
reporting unit's goodwill requires us to allocate the fair value of a reporting
unit to all of the assets and liabilities of that unit, including unrecognized
intangible assets, if any, since the implied fair value is determined as the
excess of the fair value of a reporting unit over the net amounts assigned to
its assets and liabilities in the allocation. Accordingly, the second step of
the impairment test also requires an estimate of the fair value of individual
assets and liabilities, including any unrecognized intangible assets that
belong to that unit. At March 31, 2004, we had goodwill of (Yen)26,910 million.

Accrued Severance Indemnities and Pension Liabilities

We have defined benefit retirement plans, including lump-sum severance
indemnities and pension plans, which cover substantially all of our employees.
Severance indemnities and pension costs are calculated based upon a number of
actuarial assumptions, including discount rates, expected long-term rates of
return on our plan assets and rates of increase in future compensation levels.
In accordance with US GAAP, actual results that differ from the assumptions are
accumulated and amortized over future periods, and affect our recognized net
periodic pension costs and accrued severance indemnities and pension
obligations in future periods. We had an unrecognized net actuarial loss for
domestic severance indemnities and pension plans of (Yen)300.8 billion at
March 31, 2004. Differences in actual experience or changes in assumptions may
affect our financial condition and operating results in future periods.

The discount rates for the domestic plans are set to reflect the interest rates
of high-quality fixed-rate instruments with maturities that correspond to the
timing of future benefit payments.

In developing our assumptions for expected long-term rates of return, we refer
to the historical average returns earned by the plan assets and the rates of
return expected to be available for reinvestment of existing plan assets, which
reflect recent changes in trends and economic conditions, including market
price. We also evaluate input from our actuaries, including their reviews of
asset class return expectations.

                                      46

<PAGE>

Valuation of Financial Instruments with No Available Market Prices

Some assets and liabilities, including available-for-sale securities, trading
accounts and derivatives, are reflected at their estimated fair values in our
financial statements. Fair values for the substantial majority of our portfolio
of financial instruments with no available market prices are determined based
upon externally verifiable model inputs and quoted prices. All financial
models, which are used for independent risk monitoring, must be validated and
periodically reviewed by qualified personnel independent of the area that
created the model. The fair value of derivatives is determined based upon
liquid market prices evidenced by exchange-traded prices, broker-dealer
quotations or prices of other transactions with similarly rated counterparties.
If available, quoted market prices provide the best indication of value. If
quoted market prices are not available for fixed maturity securities and
derivatives, we discount expected cash flows using market interest rates
commensurate with the credit quality and maturity of the investment.
Alternatively, we may use matrix or model pricing to determine an appropriate
fair value. In determining fair values, we consider various factors, including
time value, volatility factors and underlying options, warrants and derivatives.

Accounting Changes

Variable Interest Entities--In January 2003, the Financial Accounting Standards
Board, or the FASB, issued FASB Interpretation, or FIN, No. 46, "Consolidation
of Variable Interest Entities, an interpretation of ARB No. 51." FIN No. 46
addresses consolidation by business enterprises of variable interest entities,
or VIEs. The consolidation requirements of FIN No. 46 applied immediately to
VIEs created after January 31, 2003. The consolidation requirements applied to
older entities in the first fiscal year or interim period beginning after
June 15, 2003.

In December 2003, the FASB issued FIN No. 46 (revised December 2003),
"Consolidation of Variable Interest Entities, an interpretation of ARB No. 51,"
or FIN No. 46R. FIN No. 46R modifies FIN No. 46 in certain respects including
the scope exception, the definition of VIEs, and other factors that would
affect the determination of VIEs and primary beneficiaries that consolidate
VIEs. FIN No. 46R applies to VIEs created before February 1, 2003 no later than
the end of the first reporting period that ends after March 15, 2004, and to
all special purpose entities no later than the first reporting period that ends
after December 15, 2003. Subsequent to the issuance of FIN No. 46R, the SEC's
Chief Accountant confirmed in a letter to the American Institute of Certified
Public Accountants, or AICPA, dated March 3, 2004 that the SEC staff will not
object to the conclusion that FIN No. 46R need not be applied at a date earlier
than the original FIN 46 and that the reporting period in respect of which a
foreign private issuer would be required to apply FIN No. 46R would depend on
the entity's year-end and frequency of interim reporting. In accordance with
the letter, we intend to adopt FIN No. 46R for the fiscal year ending March 31,
2005. See note 24 to our consolidated financial statements for further
discussion on the VIEs in which we hold variable interests.

Accounting for Asset Retirement Obligation--Effective April 1, 2003, we adopted
SFAS No. 143, "Accounting for Asset Retirement Obligations." SFAS No. 143
addresses the financial accounting and reporting of obligations associated with
the retirement of tangible long-lived assets and the associated asset
retirement costs. SFAS No. 143 applies to the legal obligations associated with
the retirement of long-lived assets that result from the acquisition,
construction, development, and/or the normal operation of a long-lived asset. A
legal obligation is an obligation that a party is required to settle as a
result of an existing or enacted law, statute, ordinance, or written or oral
contract, or by legal construction of a contract under the doctrine of
promissory estoppel. The adoption of SFAS No. 143 did not have a material
impact on our financial position or results of operations.

Certain Financial Instruments with Characteristics of both Liabilities and
Equity--In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity."
SFAS No. 150 establishes standards for how an issuer classifies and measures
certain financial instruments with characteristics of both liabilities and
equity. SFAS No. 150 is effective for financial instruments entered into or
modified after May 31, 2003, and otherwise is effective at the beginning of the
first interim period

                                      47

<PAGE>

beginning after June 15, 2003, which is our fiscal year ending March 31, 2005.
On November 7, 2003, FASB Staff Position No. 150-3, "Effective Date,
Disclosures, and Transition for Mandatorily Redeemable Financial Instruments of
Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling
Interests under FASB Statement No. 150, Accounting for Certain Financial
Instruments with Characteristics of Both Liabilities and Equity," delayed the
effective date of certain provisions of SFAS No. 150 for certain mandatorily
redeemable noncontrolling interests.

We are not a party to any financial instruments entered into or modified after
May 31, 2003, to which SFAS No. 150 must be applied immediately, but we have
not completed evaluating the impact of the adoption of SFAS No. 150 to other
instruments. Accordingly, we cannot currently reasonably estimate the ultimate
impact of SFAS No. 150 on our financial position or results of operations.

Disclosure about pension and other postretirement benefit--In December 2003,
the FASB issued SFAS No. 132 (revised 2003), "Employers' Disclosures about
Pensions and Other Postretirement Benefits, an amendment of FASB Statements No.
87, 88, and 106," or SFAS No. 132R, which replaces existing FASB disclosure
requirements for pensions. SFAS No. 132R requires disclosure of more details
about plan assets, benefit obligations, cash flows, benefit costs and other
relevant information. SFAS No. 132R is generally effective for the fiscal years
ended after December 15, 2003, and for interim periods beginning after December
15, 2003. See note 15 to our consolidated financial statements for the required
disclosure.

Impairment of securities investments--In November 2003, the FASB Emerging
Issues Task Force, or the EITF, reached a consensus on Issue No. 03-1, "The
Meaning of Other-Than-Temporary Impairment and Its Application to Certain
Investments," or EITF 03-1. EITF 03-1 requires certain additional quantitative
and qualitative disclosures in addition to the disclosures already required by
SFAS No. 115, "Accounting for Certain Investments in Debt and Equity
Securities." The new disclosure requirements are applied to financial
statements for the fiscal years ended after December 15, 2003. See note 4 to
our consolidated financial statements for the required disclosure. In March
2004, the EITF also reached a consensus on additional accounting guidance for
other-than-temporary impairments, which requires an evaluation and recognition
of other-than-temporary impairment by a three-step impairment test. The
guidance should be applied for reporting periods beginning after June 15, 2004.
We have not completed the determination as to the effect of the guidance on our
financial position or results of operations.

Guarantor's Accounting and Disclosure Requirements for Guarantees--Effective
January 1, 2003, we adopted the initial recognition and measurement provisions
of FIN No. 45, "Guarantor's Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees of Indebtedness of Others, an
interpretation of FASB Statements No. 5, 57, and 107 and rescission of FASB
interpretation No. 34," which requires that, for guarantees within the scope of
FIN No. 45 issued or amended after December 31, 2002, a liability for the fair
value of the obligation undertaken in issuing the guarantee be recognized. The
adoption of FIN No. 45 did not have a material impact on our financial position
or results of operations.

Costs Associated with Exit or Disposal Activities--In June 2002, the FASB
issued SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal
Activities." SFAS No. 146 is effective for exit or disposal activities that are
initiated after December 31, 2002. This statement addresses financial
accounting and reporting for costs associated with exit or disposal activities
and nullifies EITF Issue No. 94-3, "Liability Recognition for Certain Employee
Termination Benefits and Other Costs to Exit an Activity (including Certain
Costs Incurred in a Restructuring)." The adoption of SFAS No. 146 did not have
a material impact on our financial position or results of operations.

Goodwill and Other Intangible Assets--Effective April 1, 2002, we adopted SFAS
No. 142, "Goodwill and Other Intangible Assets." SFAS No. 142 requires that
goodwill, formerly amortized over its useful life, no longer be amortized and
be tested for impairment at least annually. Further, SFAS No. 142 requires that
intangible assets that have finite useful lives will continue to be amortized
over their useful lives while intangible assets with indefinite lives will no
longer be amortized and are subject to impairment testing at least annually.

                                      48

<PAGE>

We performed the required transitional impairment tests of goodwill and
intangible assets with indefinite lives upon adoption of SFAS No. 142. The
initial adoption resulted in a cumulative adjustment charge to earnings of
(Yen)532 million for the fiscal year ended March 31, 2003.

Derivative Instruments and Hedging Activities--In April 1, 2001, we adopted
SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities,"
as amended by SFAS No. 137 and SFAS No. 138. SFAS No. 133 requires that all
derivatives, whether designated as a hedge or not, be recorded on the balance
sheet at fair value. SFAS No. 133 also requires that derivative instruments
used to hedge be identified specifically to assets, liabilities, firm
commitments or anticipated transactions and be expected to remain effective
throughout the life of the hedge. Derivative instruments that do not qualify as
either a fair value hedge or cash flow hedge are valued at fair value and
classified as trading account assets or liabilities with the resultant gain or
loss recognized in current earnings. The cumulative effect of the change in
accounting principle, net of tax, was to increase net income by (Yen)5,867
million and other changes in equity from nonowner sources by (Yen)1,257
million, respectively, for the fiscal year ended March 31, 2002.

In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities." SFAS No. 149 amends and
clarifies accounting for derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging activities under SFAS
No. 133. In particular, SFAS No. 149 (1) clarifies under what circumstances a
contract with an initial net investment meets the characteristics of a
derivative, (2) clarifies when a derivative contains a financing component that
warrants special reporting in the statement of cash flows, (3) amends the
definition of underlyings, one of the components of the three characteristics
of a derivative instrument, to include the occurrence or non-occurrence of a
specified event such as a scheduled payment under a contract, and (4) amends
certain other existing pronouncements, in particular, those related to the
scope of instruments that are subject to the requirements of SFAS No. 133. SFAS
No. 149 is generally effective for contracts entered into or modified after
June 30, 2003. The adoption of SFAS No. 149 did not have a material impact on
our financial position or results of operations.

Recently Issued Accounting Pronouncements

Transfer to the Japanese Government of the Substitutional Portion of Employee
Pension Fund Liabilities--In January 2003, the EITF reached a consensus on
Issue No. 03-2, "Accounting for the Transfer to the Japanese Government of the
Substitutional Portion of Employee Pension Fund Liabilities," or EITF 03-2,
which was ratified by the FASB in February 2003. EITF 03-2 addresses accounting
for a transfer to the Japanese government of a substitutional portion of an
employee pension fund and requires employers to account for the entire
separation process of a substitutional portion from an entire plan upon
completion of the transfer to the government of the substitutional portion of
the benefit obligation and related plan assets as the culmination of a series
of steps in a single settlement transaction. It also requires that the
difference between the fair value of the obligation and the assets required to
be transferred to the government, if any, should be accounted for as a subsidy
from the government, separately from gain or loss on settlement of the
substitutional portion of the obligation, upon completion of the transfer.

As noted in "--Recent Developments--Planned Transfer to the Japanese Government
of the Substitutional Portion of Employee Pension Fund Liabilities," in June
2003, we submitted to the government an application to transfer the obligation
to pay benefits for future employee service related to the substitutional
portion and the application was approved in August 2003. To complete the entire
separation process, in August 2004, we made another application for transfer to
the government of the remaining substitutional portion, but the timing of the
approval is not known yet. Upon completion of the separation, the
substitutional obligation and related plan assets will be transferred to a
government agency, and we will be released from paying the substitutional
portion of the benefits to our employees. The impact on our consolidated
financial statements of the transfer accounted for in accordance with EITF 03-2
is not known and cannot be reasonably estimated until the completion of the
transfer.

                                      49

<PAGE>

Loans and Debt Securities Acquired in a Transfer--In December 2003, the AICPA
issued Statement of Position 03-3, "Accounting for Certain Loans or Debt
Securities Acquired in a Transfer," or SOP 03-3, which supersedes AICPA
Practice Bulletin 6, "Amortization of Discounts on Certain Acquired Loans" and
addresses accounting for differences between contractual cash flows and cash
flows expected to be collected from an investor's initial investment in loans
or debt securities acquired in a transfer if those differences are
attributable, at least, in part, to credit quality. SOP 03-3 limits accretable
yield to the excess of the investor's estimate of undiscounted cash flows over
the investor's initial investment in the loan and prohibits the recognition of
the non-accretable difference. Under SOP 03-3, subsequent increases in cash
flows expected to be collected generally should be recognized prospectively
through adjustment of the loan's yield over its remaining life while any
decreases in cash flows expected to be collected should be recognized as
impairments. SOP 03-3 also provides guidance with regard to presentation and
disclosures.

SOP 03-3 is effective for loans acquired in the fiscal years beginning after
December 15, 2004. We have not completed our assessment of the impact of SOP
03-3 on our financial position or results of operations.

Results of Operations

The following table sets forth a summary of our results of operations for the
fiscal years ended March 31, 2002, 2003 and 2004:

<TABLE>
<CAPTION>
                                                                                    Fiscal years ended March 31,
                                                                              ----------------------------------------
                                                                                  2002          2003          2004
                                                                              ------------  ------------  ------------
                                                                                            (in billions)
<S>                                                                           <C>           <C>           <C>
Interest income.............................................................. (Yen)1,668.0  (Yen)1,260.7  (Yen)1,120.2
Interest expense.............................................................        782.3         435.1         338.9
                                                                              ------------  ------------  ------------
Net interest income..........................................................        885.7         825.6         781.3
                                                                              ------------  ------------  ------------
Provision (credit) for credit losses.........................................        466.9         287.3        (142.4)
Non-interest income..........................................................        313.1         724.6         983.1
Non-interest expense.........................................................        948.2         973.3       1,035.0
                                                                              ------------  ------------  ------------
Income (loss) from continuing operations before income tax expense (benefit)
  and cumulative effect of a change in accounting principle..................       (216.3)        289.6         871.8
Income tax expense (benefit).................................................        (76.5)         50.5         333.6
                                                                              ------------  ------------  ------------
Income (loss) from continuing operations before cumulative effect of a change
  in accounting principle....................................................       (139.8)        239.1         538.2
Income (loss) from discontinued operations--net..............................          1.2          10.4          (0.6)
Cumulative effect of a change in accounting principle, net of tax............          5.9          (0.5)           --
                                                                              ------------  ------------  ------------
Net income (loss)............................................................ (Yen) (132.7) (Yen)  249.0  (Yen)  537.6
                                                                              ============  ============  ============
</TABLE>

We reported net income of (Yen) 537.6 billion for the fiscal year ended March
31, 2004, compared to net income of (Yen)249.0 billion for the fiscal year
ended March 31, 2003. Our basic earnings per common share (net income available
to common shareholders) for the fiscal year ended March 31, 2004 was
(Yen)105.10 compared to an earnings per share of (Yen)52.49 for the fiscal year
ended March 31, 2003. Income from continuing operations before income tax
expense and cumulative effect of a change in accounting principle for the
fiscal year ended March 31, 2004 was (Yen)871.8 billion, compared with
(Yen)289.6 billion for the fiscal year ended March 31, 2003. The changes in our
operating results were primarily attributable to the following:

..   The reversal of allowance for credit losses of (Yen)142.4 billion was
    recorded for the fiscal year ended March 31, 2004, compared with provision
    for credit losses of (Yen)287.3 billion for the fiscal year ended March 31,
    2003. The reversal of allowance for credit losses was due mainly to
    improvement of our loan portfolio as evidenced by the reduction in our
    nonperforming and impaired loans through various measures, including the
    disposal of

                                      50

<PAGE>

  nonperforming loans, and improving credit status of borrowers in Japan in
   general as evidenced by the decreased number of bankruptcy filings during
   the fiscal year ended March 31, 2004.

..   Non-interest income increased (Yen)258.5 billion from (Yen)724.6 billion
    for the fiscal year ended March 31, 2003 to (Yen)983.1 billion for the
    fiscal year ended March 31, 2004. This increase was primarily attributable
    to an increase of (Yen)248.0 billion in net foreign exchange gains
    reflecting the appreciation of the yen against foreign currencies, and an
    increase of (Yen)64.0 billion in net investment securities gains mainly due
    to the improvement in the Japanese stock market. Refund of local taxes by
    the Tokyo Metropolitan Government also contributed to the increase in
    non-interest income. These increases were partially offset by a decrease of
    (Yen)156.4 billion in net trading account profits, primarily due to the
    rise in long-term interest rates in Japan.

These favorable changes were partially offset by a decrease of (Yen)44.3
billion in net interest income due primarily to a decline in the average
interest rate spread.

Net Interest Income

Net interest income is a function of:

..   the amount of interest-earning assets;

..   the so-called "spread," or the difference between the rate of interest
    earned on interest-earning assets and the rate of interest paid on
    interest-bearing liabilities;

..   the general level of interest rates; and

..   the proportion of interest-earning assets financed by non-interest-bearing
    liabilities and equity.

Our net interest income for the fiscal years ended March 31, 2002, 2003 and
2004 were not materially affected by gains or losses resulting from derivative
financial instruments used for hedging purposes.

The following is a summary of the interest rate spread for the fiscal years
ended March 31, 2002, 2003 and 2004:

<TABLE>
<CAPTION>
                                             Fiscal years ended March 31,
                           ----------------------------------------------------------------
                                   2002                  2003                  2004
                           --------------------  --------------------  --------------------
                              Average    Average    Average    Average    Average    Average
                              balance     rate      balance     rate      balance     rate
                           ------------- ------- ------------- ------- ------------- -------
                                           (in billions, except percentages)
<S>                        <C>           <C>     <C>           <C>     <C>           <C>
Interest-earning assets:
   Domestic............... (Yen)46,512.1  1.42%  (Yen)49,643.3  1.21%  (Yen)54,930.7  1.07%
   Foreign................      21,316.2  4.72        18,686.8  3.53        17,660.7  3.02
                           -------------         -------------         -------------
       Total.............. (Yen)67,828.3  2.46%  (Yen)68,330.1  1.84%  (Yen)72,591.4  1.54%
                           =============         =============         =============
Financed by:
Interest-bearing funds:
   Domestic............... (Yen)46,979.4  0.52%  (Yen)50,100.6  0.34%  (Yen)55,267.0  0.30%
   Foreign................      15,183.8  3.53        12,286.4  2.17        11,874.3  1.45
                           -------------         -------------         -------------
       Total..............      62,163.2  1.26        62,387.0  0.70        67,141.3  0.50
Non-interest-bearing funds       5,665.1    --         5,943.1    --         5,450.1    --
                           -------------         -------------         -------------
       Total.............. (Yen)67,828.3  1.15%  (Yen)68,330.1  0.63%  (Yen)72,591.4  0.46%
                           =============         =============         =============
Spread on:
   Interest-bearing funds.                1.20%                 1.14%                 1.04%
   Total funds............                1.31%                 1.21%                 1.08%
</TABLE>

                                      51

<PAGE>

   Fiscal Year Ended March 31, 2004 Compared to Fiscal Year Ended March 31, 2003

Net interest income for the fiscal year ended March 31, 2004 was (Yen)781.3
billion, a decrease of (Yen)44.3 billion, or 5.4%, from (Yen)825.6 billion for
the fiscal year ended March 31, 2003. This decrease was due primarily to a
decline in the average interest rate spread. In addition, a decrease in average
foreign loans, which earn relatively higher yields, contributed to the decrease
in net interest income.

The average interest rate spread decreased 10 basis points from 1.14% for the
fiscal year ended March 31, 2003 to 1.04% for the fiscal year ended March 31,
2004. The average rate of both the foreign interest-earning assets and foreign
interest-bearing liabilities declined during the fiscal year ended March 31,
2004, primarily due to the decline in short-term interest rates in most foreign
markets. Since the average balance of foreign interest-earning assets for the
fiscal year ended March 31, 2004 was about 1.49 times larger than the average
balance of foreign interest-bearing liabilities for the same period, the
decline in the average rate had a negative effect on our net interest income.

Net interest income as a percentage of average total interest-earning assets
decreased 13 basis points from 1.21% for the fiscal year ended March 31, 2003
to 1.08% for the fiscal year ended March 31, 2004.

The increase in average interest-earning assets for the fiscal year ended March
31, 2004 was primarily attributable to increases in average trading account
assets, average investment securities and average call loans, funds sold, and
receivables under resale agreements and securities borrowing transactions,
which yield relatively low rate of interest income. These increases were
partially offset by decreases in average interest-earning deposits and average
loans, which yield relatively high rate of interest income. The shift in
investment from relatively high yielding assets to low yielding assets more
than offset an increase in average interest-earning assets and had a negative
impact on interest income.

The increase in average interest-bearing liabilities for the fiscal year ended
March 31, 2004 primarily reflected an increase in average call money, funds
purchased, and payables under repurchase agreements and securities lending
transactions, average deposits and average other short-term borrowings and
trading account liabilities.

   Fiscal Year Ended March 31, 2003 Compared to Fiscal Year Ended March 31, 2002

Net interest income for the fiscal year ended March 31, 2003 was (Yen)825.6
billion, a decrease of (Yen)60.1 billion, or 6.8%, from (Yen)885.7 billion for
the fiscal year ended March 31, 2002. This decrease was due primarily to a
decline in the average interest rate spread in the further declining interest
rate environment. The decline in interest rate spread more than offset the
impact of a net increase in average interest-earning assets.

The average interest rate spread decreased 6 basis points from 1.20% for the
fiscal year ended March 31, 2002 to 1.14% for the fiscal year ended March 31,
2003. Net interest income as a percentage of average total interest-earning
assets decreased 10 basis points from 1.31% for the fiscal year ended March 31,
2002 to 1.21% for the fiscal year ended March 31, 2003.

Average interest-earning assets for the fiscal year ended March 31, 2003 was
(Yen)68,330.1 billion, an increase of (Yen)501.8 billion, or 0.7%, from
(Yen)67,828.3 billion for the fiscal year ended March 31, 2002. This increase
was principally attributable to an increase of (Yen)1,790.3 billion in average
investment securities and an increase (Yen)1,267.3 billion in average loans,
partially offset by decreases in average interest-earning deposits, average
call loans, funds sold, and receivables under resale agreements and securities
borrowing transactions. The increase in average investment securities was
attributable primarily to increases in Japanese government and foreign bonds,
including U.S. treasury bonds, and reflected few viable investment options due
to the extremely low rates of return in Japan. The average of interest-bearing
liabilities for the fiscal year ended March 31, 2003 was (Yen)62,387.0

                                      52

<PAGE>

billion, an increase of (Yen)223.8 billion, or 0.4%, from (Yen)62,163.2 billion
for the fiscal year ended March 31, 2002. This increase was principally
attributable to an increase in average domestic deposits, which was primarily
comprised of average demand deposits, and average domestic long-term debt,
partly offset by a decrease in average debentures and a decrease in average
short-term funds in money markets, such as call money and funds purchased, and
payables under repurchase agreements.

Provision (Credit) for Credit Losses

Provision (credit) for credit losses are charged to operations to maintain the
allowance for credit losses at a level deemed appropriate by management. For a
description of the approach and methodology used to establish the allowance for
credit losses, see "Item 5.B. Liquidity and Capital Resources--Financial
Condition--Allowance for Credit Losses, Nonperforming and Past Due Loans."

   Fiscal Year Ended March 31, 2004 Compared to Fiscal Year Ended March 31, 2003

A reversal of allowance for credit losses of (Yen)142.4 billion was recorded
for the fiscal year ended March 31, 2004, compared with a provision for credit
losses of (Yen)287.3 billion for the fiscal year ended March 31, 2003. This
change was due mainly to a decrease in our specific allowance as a result of
our reduction of nonperforming loans and a decrease in our formula allowance
reflecting a decline in loans classified as special mention or substandard. For
a further discussion of the allowance for credit losses, see "Item 5.B.
Liquidity and Capital Resources--Financial Condition--Allowance for Credit
Losses, Nonperforming and Past Due Loans."

   Fiscal Year Ended March 31, 2003 Compared to Fiscal Year Ended March 31, 2002

The provision for credit losses for the fiscal year ended March 31, 2003 was
(Yen)287.3 billion, representing a decrease of (Yen)179.6 billion from
(Yen)466.9 billion for the fiscal year ended March 31, 2002. This decrease was
attributable primarily to a decrease in the impairment allowance of (Yen)302.7
billion from (Yen)978.5 billion at March 31, 2002 to (Yen)675.8 billion at
March 31, 2003, which reflected a decrease of (Yen)1,141.6 billion in impaired
loans during the fiscal year ended March 31, 2003.

                                      53

<PAGE>

Non-Interest Income

The following table is a summary of our non-interest income for the fiscal
years ended March 31, 2002, 2003 and 2004:

<TABLE>
<CAPTION>
                                                                  Fiscal years ended March 31,
                                                               -----------------------------------
                                                                  2002*        2003*       2004
                                                               -----------  ----------  ----------
                                                                          (in billions)
<S>                                                            <C>          <C>         <C>
Fees and commissions:
   Trust fees................................................. (Yen)  22.4  (Yen) 21.4  (Yen) 19.5
   Fees on funds transfer and service charges for collections.        53.4        54.9        57.0
   Fees and commissions on international business.............        52.5        53.6        53.1
   Fees and commissions on credit card business...............        44.9        57.1        60.5
   Service charges on deposits................................        29.8        34.6        36.2
   Fees and commissions on securities business................        33.4        49.2        79.0
   Other fees and commissions.................................        99.5       113.6       135.6
                                                               -----------  ----------  ----------
       Total..................................................       335.9       384.4       440.9
Foreign exchange gains (losses)--net..........................      (184.5)       (0.6)      247.4
Trading account profits--net..................................       111.1       273.7       117.3
Investment securities gains--net..............................        11.7        33.8        97.8
Refund of the local taxes by the Tokyo Metropolitan Government          --          --        32.1
Other non-interest income.....................................        38.9        33.3        47.6
                                                               -----------  ----------  ----------
   Total non-interest income.................................. (Yen) 313.1  (Yen)724.6  (Yen)983.1
                                                               ===========  ==========  ==========
</TABLE>
--------
* Reclassified to conform to the presentation for the fiscal year ended March
  31, 2004.

Net foreign exchange gains (losses) primarily include net gains (losses) on
currency derivative instruments entered into for trading purposes and
transaction gains (losses) on the translation into Japanese yen of monetary
assets and liabilities denominated in foreign currencies. The transaction gains
(losses) on the translation into Japanese yen fluctuate from period to period
depending upon the spot rates at the end of each fiscal year. This is primarily
because the transaction gains (losses) on translation of securities available
for sale, such as bonds denominated in foreign currencies, are not included in
current earnings, but are reflected in other changes in equity from nonowner
sources, while in principle all transaction gains (losses) on translation of
monetary liabilities denominated in foreign currencies are included in current
earnings.

Net trading account profits primarily include net gains (losses) on trading
securities and interest rate derivative instruments entered into for trading
purposes. Trading account assets or liabilities are carried at fair value and
any changes in the value of trading account assets or liabilities, including
interest rate derivatives, are recorded in net trading account profits.
Derivative instruments for trading purposes also include those used as hedges
of net exposures rather than for specifically identified assets or liabilities,
which do not meet the specific criteria for hedge accounting.

Net investment securities gains primarily include net gains on sales of
marketable securities, particularly marketable equity securities. In addition,
impairment losses are recognized as an offset of net investment securities
gains when management concludes that declines in fair value of investment
securities are other than temporary.

   Fiscal Year Ended March 31, 2004 Compared to Fiscal Year Ended March 31, 2003

Non-interest income for the fiscal year ended March 31, 2004 was (Yen)983.1
billion, an increase of (Yen)258.5 billion, or 35.7%, from (Yen)724.6 billion
for the fiscal year ended March 31, 2003. This increase was primarily
attributable

                                      54

<PAGE>

to an increase in net foreign exchange gains of (Yen)248.0 billion and an
increase in net investment securities gains of (Yen)64.0 billion. These gains
were partially offset by a decrease in net trading account profits of
(Yen)156.4 billion.

Fees and commissions for the fiscal year ended March 31, 2004 increased
(Yen)56.5 billion from the previous fiscal year. This increase primarily
reflected an increase in fees and commissions on securities business, of which
(Yen)26.5 billion was due to an increase in fees earned by Mitsubishi
Securities. This increase was mainly because only seven months of fees and
commissions generated by Mitsubishi Securities were recorded for the previous
fiscal year, while its fees and commissions for twelve months were recorded for
the fiscal year ended March 31, 2004. In addition, fees and commissions on
securities business in Mitsubishi Securities increased for the fiscal year
ended March 31, 2004, primarily due to an increase in equity-related
commissions, which was in line with increased trading volume of the Japanese
stock markets in general during the same period. Other factors contributing to
the increase in other fees and commissions included expanding fee businesses
such as agency fees earned on the sale of annuities to individual customers at
our branches which act as sales agents for insurance companies, and fees from
our investment banking activities.

Net trading account profits for the fiscal year ended March 31, 2004 were
(Yen)117.3 billion, a decrease of (Yen)156.4 billion, or 57.2%, from (Yen)273.7
billion for the fiscal year ended March 31, 2003. The net trading account
profits for the fiscal years ended March 31, 2003 and 2004 consisted of the
following:

<TABLE>
<CAPTION>
                                                                                           Fiscal years ended
                                                                                                March 31,
                                                                                          ---------------------
                                                                                             2003       2004
                                                                                          ---------- ----------
                                                                                              (in billions)
<S>                                                                                       <C>        <C>
Net profits on derivative instruments, primarily interest-rate futures, swaps and options (Yen)262.7 (Yen) 14.7
Net profits on trading securities........................................................       11.0      102.6
                                                                                          ---------- ----------
   Net trading account profits........................................................... (Yen)273.7 (Yen)117.3
                                                                                          ========== ==========
</TABLE>

Profits on derivative instruments were largely affected by the impact of the
rise in Japanese long-term interest rates on interest rate swaps principally
held for risk management purposes. Although such contracts were entered into
for risk management purposes, a majority of them did not meet the conditions to
qualify for hedge accounting under US GAAP and thus were accounted for as
trading positions.

For the fiscal year ended March 31, 2004, we generally maintained net
receive-fix and pay-variable positions in our interest rate swap portfolios for
the purpose of managing interest rate risks on domestic deposits, and our
interest rate swap positions resulted in losses in value in a rising Japanese
long-term interest rate environment during the fiscal year ended March 31,
2004. The decrease in net profits on derivative instruments of (Yen)248.0
billion was partially offset by an increase in net profits on trading
securities of (Yen)91.6 billion, primarily reflecting improved performance of
trading in debt and equity securities at Mitsubishi Securities supported by
high interest rate volatility and improvements in the Japanese stock markets
during the fiscal year ended March 31, 2004.

Net foreign exchange gains for the fiscal year ended March 31, 2004 were
(Yen)247.4 billion, an increase of (Yen)248.0 billion from net loss of (Yen)0.6
billion for the fiscal year ended March 31, 2003. The increase in net foreign
exchange gains primarily reflected an increase in transaction gains on
translation of monetary liabilities denominated in foreign currencies due to
the appreciation of the yen. All transaction gains or losses on translation of
monetary liabilities denominated in foreign currencies are included in current
earnings. However, the transaction gains or losses on translation of securities
available for sale, such as bonds denominated in foreign currencies, are not
included in current earnings but are reflected in other changes in equity from
nonowner sources.

                                      55

<PAGE>

Net investment securities gains for the fiscal year ended March 31, 2004 were
(Yen)97.8 billion, an increase of (Yen)64.0 billion, from net gains of
(Yen)33.8 billion for the fiscal year ended March 31, 2003. Major components of
net investment securities gains for the fiscal years ended March 31, 2003 and
2004 are summarized below:

<TABLE>
<CAPTION>
                                                             Fiscal years ended
                                                                  March 31,
                                                          ------------------------
                                                              2003         2004
                                                          -----------  -----------
                                                                (in billions)
<S>                                                       <C>          <C>
Net gains on sales of marketable equity securities....... (Yen) 116.6  (Yen) 269.8
Impairment losses on marketable equity securities........      (208.1)       (10.2)
Other--net, principally gains (losses) on debt securities       125.3       (161.8)
                                                          -----------  -----------
   Net investment securities gains....................... (Yen)  33.8  (Yen)  97.8
                                                          ===========  ===========
</TABLE>

The increase in net investment securities gains during the fiscal year ended
March 31, 2004 reflected the improvement in the Japanese stock market, as net
gains on sales of marketable equity securities increased and impairment losses
on marketable equity securities decreased compared to the previous fiscal year.
These gains were partially offset by losses on debt securities, which were
mainly due to impairment losses on Japanese government bonds, reflecting the
rise in long-term interest rates in Japan.

Non-interest income also increased due to the refund of the local taxes by the
Tokyo Metropolitan Government of (Yen)32.1 billion in October 2003. For further
information regarding this refund, see "--Recent Developments--Legal
Proceedings for Local Taxes."

   Fiscal Year Ended March 31, 2003 Compared to Fiscal Year Ended March 31, 2002

Non-interest income for the fiscal year ended March 31, 2003 was (Yen)724.6
billion, an increase of (Yen)411.5 billion, or 131.5%, from (Yen)313.1 billion
for the fiscal year ended March 31, 2002. This increase was attributable to an
increase in fees and commissions of (Yen)48.5 billion, an increase in net
trading account profits of (Yen)162.6 billion, a decrease in net foreign
exchange losses of (Yen)183.9 billion, and an increase in net investment
securities gains of (Yen)22.1 billion.

Fees and commissions for the fiscal year ended March 31, 2003 were (Yen)384.4
billion, an increase of (Yen)48.5 billion, or 14.4%, from (Yen)335.9 billion
for the fiscal year ended March 31, 2002. This increase primarily reflected an
increase of (Yen)15.8 billion in fees and commissions on securities business,
an increase of (Yen)14.1 billion in other fees and commissions. Fees and
commissions on securities business for the fiscal year ended March 31, 2003
included (Yen)19.4 billion of fees and commissions of Mitsubishi Securities,
which became our consolidated subsidiary on September 1, 2002. In other fees
and commissions for the fiscal year ended March 31, 2003, (Yen)2.8 billion in
fees and commissions were newly earned in connection with our insurance
brokerage activities. An increase of (Yen)3.4 billion in fees and commissions
at UnionBanCal Corporation also contributed to the increase in other fees and
commissions.

Net trading account profits for the fiscal year ended March 31, 2003 were
(Yen)273.7 billion, an increase of (Yen)162.6 billion, or 146.4%, from
(Yen)111.1 billion for the fiscal year ended March 31, 2002. The net trading
account profits for the fiscal years ended March 31, 2002 and 2003 consisted of
the following:

<TABLE>
<CAPTION>
                                                                                            Fiscal years ended
                                                                                                March 31,
                                                                                          ----------------------
                                                                                             2002        2003
                                                                                          ----------  ----------
                                                                                              (in billions)
<S>                                                                                       <C>         <C>
Net profits on derivative instruments, primarily interest-rate futures, swaps and options (Yen)120.9  (Yen)262.7
Net profits (losses) on trading securities...............................................       (9.8)       11.0
                                                                                          ----------  ----------
   Net trading account profits........................................................... (Yen)111.1  (Yen)273.7
                                                                                          ==========  ==========
</TABLE>

                                      56

<PAGE>

The increase in net profits on derivative instruments was due primarily to an
increase in net profits on interest rate swaps and interest rate options. In
particular, in order to manage interest rate risks on domestic deposits, we had
net receive-fix and pay-variable positions in our interest rate swap
portfolios. These portfolios gained in value in a declining interest rate
environment.

The net profits on trading securities for the fiscal year ended March 31, 2003
were (Yen)11.0 billion, compared to net losses of (Yen)9.8 billion for the
fiscal year ended March 31, 2002. This improvement in trading securities
transactions primarily reflected net profits on trading of foreign bonds.

Net foreign exchange losses for the fiscal year ended March 31, 2003 were
(Yen)0.6 billion, compared to net foreign exchange losses of (Yen)184.5 billion
for the fiscal year ended March 31, 2002. Transaction gains on translation of
foreign currency long-term debt for the fiscal year ended March 31, 2003
reflected primarily the appreciation of the yen against the US dollar and other
foreign currencies. We had net losses on foreign exchange contracts entered
into for trading purposes for the fiscal year ended March 31, 2003 due to the
unfavorable foreign exchange markets. Other foreign exchange net gains for the
fiscal year ended March 31, 2003 reflected transaction gains on translation of
foreign currency-denominated borrowings used to manage the foreign currency
exposure of available-for-sale debt securities. This increase was due primarily
to the appreciation of the yen against the US dollar and other foreign
currencies while transaction losses on translation of foreign
currency-denominated available-for-sale debt securities were recorded in other
changes in equity from nonowner sources.

Net investment securities gains for the fiscal year ended March 31, 2003 were
(Yen)33.8 billion, compared to net gains of (Yen)11.7 billion for the fiscal
year ended March 31, 2002. Major components of net investment securities gains
for the fiscal years ended March 31, 2002 and 2003 are summarized below:

<TABLE>
<CAPTION>
                                                        Fiscal years ended
                                                             March 31,
                                                     ------------------------
                                                         2002         2003
                                                     -----------  -----------
                                                           (in billions)
  <S>                                                <C>          <C>
  Net gains on sales of marketable equity securities (Yen) 186.6  (Yen) 116.6
  Impairment losses on marketable equity securities.      (199.4)      (208.1)
  Other net gains...................................        24.5        125.3
                                                     -----------  -----------
     Net investment securities gains................ (Yen)  11.7  (Yen)  33.8
                                                     ===========  ===========
</TABLE>

Pursuant to the legislation forbidding banks, including us, from holding stocks
with aggregate market values less unrealized gains in excess of our Tier I
capital after September 30, 2004, a date which was later extended to September
30, 2006, we actively sold our marketable equity securities. The decrease in
net gains on sales of marketable equity securities reflected further declining
stock market prices during the fiscal year ended March 31, 2003. In addition to
sales in the stock markets, in the fiscal year ended March 31, 2003, we sold
marketable equity securities to the Bank of Japan and through exchange traded
funds.

The increase in impairment losses on marketable equity securities for the
fiscal year ended March 31, 2003 also reflected the continuing declines in
stock prices in Japan. We have determined other-than-temporary declines in fair
value of marketable equity securities primarily based on factors such as
internal credit ratings, the extent of decline in market price and the length
of time during which the decline has existed. Due to the change in the
accounting estimate reflecting the long and sustained decline in the Japanese
stock markets, we recognized additional impairment losses on investment
securities amounting to (Yen)21.2 billion for the fiscal year ended March 31,
2003.

Other net gains primarily included net gains on sales of debt securities,
including bonds. The increase in such gains resulted mainly from increased
sales of foreign bonds. The market prices of foreign bonds generally rose as
interest rates declined during the fiscal year ended March 31, 2003.

                                      57

<PAGE>

Other non-interest income decreased (Yen)5.6 billion, or 14.6%, from (Yen)38.9
billion for the fiscal year ended March 31, 2002 to (Yen)33.3 billion for the
fiscal year ended March 31, 2003. Other non-interest income was primarily
comprised of income from the lease of software, net gains on sales of various
assets, including software and other dividend income. The decrease for the
fiscal year ended March 31, 2003 reflected several small decreases in these
components.

Non-Interest Expense

The following table shows a summary of our non-interest expense for the fiscal
years ended March 31, 2002, 2003 and 2004:

<TABLE>
<CAPTION>
                                                            Fiscal years ended March 31,
                                                         ----------------------------------
                                                           2002*      2003*        2004
                                                         ---------- ---------- ------------
                                                                    (in billions)
<S>                                                      <C>        <C>        <C>
Salaries and employee benefits.......................... (Yen)363.4 (Yen)397.8 (Yen)  412.5
Occupancy expenses--net.................................      102.3       88.9         86.6
Losses (gains) on other real estate owned...............        5.0        0.1         (0.6)
Goodwill amortization...................................        4.6         --           --
Fees and commission expense.............................       66.5       70.3         68.9
Amortization of intangible assets.......................       28.9       38.7         54.2
Minority interest in income of consolidated subsidiaries       22.9        6.0         45.8
Insurance premiums, including deposit insurance.........       33.6       38.8         45.1
Communications..........................................       18.9       19.6         25.5
Other non-interest expenses.............................      302.1      313.1        297.0
                                                         ---------- ---------- ------------
   Total non-interest expense........................... (Yen)948.2 (Yen)973.3 (Yen)1,035.0
                                                         ========== ========== ============
</TABLE>
--------
* Reclassified to conform to the presentation for the fiscal year ended March
  31, 2004.

   Fiscal Year Ended March 31, 2004 Compared to Fiscal Year Ended March 31, 2003

Non-interest expense for the fiscal year ended March 31, 2004 was (Yen)1,035.0
billion, an increase of (Yen)61.7 billion from the previous fiscal year. This
increase was primarily attributable to an increase in minority interest in
income of consolidated subsidiaries of (Yen)39.8 billion. The increases in
salaries and employee benefits, amortization of intangible assets and insurance
premiums, including deposit insurance, also caused the increase in non-interest
expense compared to the previous fiscal year.

Salaries and employee benefits increased primarily due to an increase of
(Yen)14.4 billion in salaries and employee benefits in Mitsubishi Securities,
as only seven months of salaries and employee benefits of Mitsubishi Securities
were recorded for the previous fiscal year, while its salaries and employee
benefits for twelve months were recorded for the fiscal year ended March 31,
2004.

Amortization of intangible assets increased primarily due to an increase in the
capitalized cost of software as we continued to invest in new information
systems, such as investment in the new IT system for our foreign offices.

Minority interest in income of consolidated subsidiaries increased (Yen)39.8
billion from (Yen)6.0 billion for the fiscal year ended March 31, 2003 to
(Yen)45.8 billion for the fiscal year ended March 31, 2004. This increase was
primarily attributable to the improvement in the results of operations at
Mitsubishi Securities from a net loss for the fiscal year ended March 31, 2003
to positive net income for the fiscal year ended March 31, 2004. A significant
recovery in the stock markets during the fiscal year ended March 31, 2004
contributed primarily to the improvement.

Insurance premiums, including that for deposit insurance, increased reflecting
an increase in our deposits.

                                      58

<PAGE>

These increases were partially offset by a decrease of (Yen)16.1 billion in
other non-interest expenses. Although there was an increase in sundry expenses
for the fiscal year ended March 31, 2004, absences of major and temporary
expense items which were incurred only for the previous fiscal year led to the
decrease in other non-interest expenses. Other non-interest expenses for the
previous fiscal year included a (Yen)19.6 billion loss resulting from the
decrease in net assets in a subsidiary that was accounted for as having been
sold in connection with the merger of the four securities companies to form
Mitsubishi Securities on September 1, 2002, and the additional post-merger
expense of (Yen)10.6 billion that was incurred in completing the merger.

   Fiscal Year Ended March 31, 2003 Compared to Fiscal Year Ended March 31, 2002

Non-interest expense for the fiscal year ended March 31, 2003 was (Yen)973.3
billion, an increase of (Yen)25.1 billion, or 2.7%, from (Yen)948.2 billion for
the fiscal year ended March 31, 2002. This increase was due primarily to an
increase of (Yen)34.4 billion in salaries and employee benefits, partially
offset by a decrease of (Yen)13.4 billion in net occupancy expenses.

Salaries and employee benefits for the fiscal year ended March 31, 2003 were
(Yen)397.8 billion, an increase of (Yen)34.4 billion, or 9.5%, from (Yen)363.4
billion for the fiscal year ended March 31, 2002. This increase primarily
reflected an increase of (Yen)8.9 billion in net periodic pension costs and an
increase of (Yen)24.0 billion of salaries and employee benefits of Mitsubishi
Securities, which became our consolidated subsidiary on September 1, 2002 as a
result of the merger of four securities companies. The increase in net periodic
pension costs was due primarily to an increase of (Yen)9.2 billion in
amortization of net actuarial loss. In accordance with SFAS No. 87, "Employers'
Accounting for Pensions," the minimum amortization of actuarial loss was
included as a component of net periodic pension costs for the fiscal years
ended March 31, 2002 and 2003 as the unrealized net loss exceeded 10% of the
projected benefit obligation. The net actuarial loss reflected the fact that
the actual return on plan assets fell below the expected return on plan assets
during recent fiscal years. Plan assets, which include pension funds managed by
various life insurance companies, investment advisory companies and trust
banks, consisted of interest-earning deposits at banks, Japanese government
bonds, other debt securities and marketable equity securities issued by
domestic and foreign entities. Pension assets managed by insurance companies
are included in pooled investment portfolios. Expected rates of return on plan
assets are reviewed annually and computed primarily based on the historical
average of long-term returns on such assets. The continuously depressed
Japanese economy has adversely affected domestic stock markets. As a result,
with respect to us and our domestic subsidiaries' plans, the actual return on
the plan assets was negative by (Yen)39.9 billion for the fiscal year ended
March 31, 2002 and negative by (Yen)39.5 billion for the fiscal year ended
March 31, 2003. We decreased the expected rate of return on plan assets from
4.91% for the fiscal year ended March 31, 2002 to 4.14% for the fiscal year
ended March 31, 2003. The increase in salaries and employee benefits was
partially offset by a decrease in salaries resulting from a reduction in the
number of employees.

Net occupancy expenses for the fiscal year ended March 31, 2003 were (Yen)88.9
billion, a decrease of (Yen)13.4 billion, or 13.1%, from (Yen)102.3 billion for
the fiscal year ended March 31, 2002. This decrease was due primarily to the
reduction and consolidation of offices as a whole, while net occupancy expenses
of Mitsubishi Securities contributed to an increase in net occupancy expenses.

Losses on other real estate owned for the fiscal year ended March 31, 2003 were
(Yen)0.1 billion, a decrease of (Yen)4.9 billion, or 98.0%, from (Yen)5.0
billion for the fiscal year ended March 31, 2002. This decrease reflected a
decrease in other real estate owned primarily through sales.

There was no goodwill amortization expense for the fiscal year ended March 31,
2003 as a result of the adoption of SFAS No. 142, which eliminated the
amortization of goodwill, effective April 1, 2002.

Amortization of intangible assets for the fiscal year ended March 31, 2003 was
(Yen)38.7 billion, an increase of (Yen)9.8 billion, or 33.9%, from (Yen)28.9
billion for the fiscal year ended March 31, 2002. This increase primarily
reflected an increase in the capitalized cost of software as we continued to
invest in new information systems.

                                      59

<PAGE>

Minority interest in income of consolidated subsidiaries for the fiscal year
ended March 31, 2003 was (Yen)6.0 billion, a decrease of (Yen)16.9 billion, or
73.7%, from (Yen)22.9 billion for the fiscal year ended March 31, 2002. This
decrease was primarily attributable to the net loss of Mitsubishi Securities
that was newly recognized as a result of the merger in the fiscal year ended
March 31, 2003.

Insurance premiums for the fiscal year ended March 31, 2003 were (Yen)38.8
billion, an increase of (Yen)5.2 billion, or 15.5%, from (Yen)33.6 billion for
the fiscal year ended March 31, 2002. This increase primarily reflected an
increase in domestic deposits.

Other non-interest expenses for the fiscal year ended March 31, 2003 were
(Yen)313.1 billion, an increase of (Yen)11.0 billion, or 3.7%, from (Yen)302.1
billion for the fiscal year ended March 31, 2002. Major items included in the
non-interest expenses for the fiscal year ended March 31, 2003 are a (Yen)19.6
billion loss which resulted from the decrease in net assets in Tokyo-Mitsubishi
Securities, a subsidiary that was accounted for as having been sold in
connection with the merger of the four securities companies to form Mitsubishi
Securities on September 1, 2002, and the additional post-merger expense of
(Yen)10.6 billion that was incurred in completing the merger. These increases
were partly offset by a decrease of (Yen)21.2 billion in the provision for
allowance for off-balance-sheet credit instruments. The provision for allowance
for off-balance-sheet credit instruments for the fiscal year ended March 31,
2002 included an allocated provision of (Yen)19.6 billion against loan
commitments extended to WorldCom, Inc. We fulfilled the commitments extended to
WorldCom, Inc. and recorded charge-offs for the fiscal year ended March 31,
2003.

Income Tax Expense (Benefit)

The following table presents a summary of our income tax expense (benefit):

<TABLE>
<CAPTION>
                                                                                     Fiscal years ended March 31,
                                                                                 -----------------------------------
                                                                                     2002        2003        2004
                                                                                 -----------  ----------  ----------
                                                                                            (in billions)
<S>                                                                              <C>          <C>         <C>
Income (loss) from continuing operations before income tax expense (benefit) and
  cumulative effect of a change in accounting principle......................... (Yen)(216.3) (Yen)289.6  (Yen)871.8
Income tax expense (benefit).................................................... (Yen) (76.6) (Yen) 50.4  (Yen)333.6
Effective tax rate..............................................................        35.4%       17.4%       38.3%
Normal effective statutory tax rate.............................................        38.0%       38.0%       38.0%
</TABLE>

Our holding company, Mitsubishi Tokyo Financial Group, Inc. elected to file
consolidated corporate-tax returns starting from the fiscal year ended March
31, 2003, and we are a member of the consolidated group. We, however, have used
a separate return method of allocation. Under the separate return method of
allocation, current and deferred taxes for the fiscal years ended March 31,
2003 and 2004 were determined by applying the requirements of FASB No. 109 as
if we were filing a separate tax return. Although the consolidated
corporate-tax system requires us to pay, for the fiscal years ended March 31,
2003 and 2004, a surcharge tax of 2.0% of taxable income in addition to the
national corporate income tax rate of 30.0% applied to separate tax returns
filers, we do not take such surcharge tax into consideration in determining
current and deferred income taxes under the separate return method of
allocation.

In addition, under the new local tax laws which was enacted in March 2003 for
the fiscal years beginning after March 31, 2004, new uniform local taxes become
effective. These new rules introduce value-added taxes and replace part of the
existing local taxes based on income. The new local taxes are computed based on
three components: (a) amount of profit, (b) amount of value-added (total
payroll, net interest paid or received, net rent paid and income before use of
net operating losses) and (c) amount of total paid-in capital. The taxes are
computed by adding together the totals of each of the three components which
are calculated separately.

The enactment of the new uniform local tax laws mentioned above, which will
supersede the current local taxes, including the local taxes levied by Tokyo
Metropolitan Government, resulted in a decrease of (Yen)63.9 billion in income
tax expense for the fiscal year ended March 31, 2003 through an increase in
deferred tax assets.

                                      60

<PAGE>

Reconciling items between the combined normal effective statutory tax rates and
the effective income tax rates for the fiscal years ended March 31, 2002, 2003
and 2004 are summarized as follows:

<TABLE>
<CAPTION>
                                                                        Fiscal years ended
                                                                             March 31,
                                                                        ------------------
                                                                        2002*   2003  2004
                                                                        -----  -----  ----
<S>                                                                     <C>    <C>    <C>
Combined normal effective statutory tax rate...........................  38.0%  38.0% 38.0%
Reconciling items:
   Nondeductible expenses..............................................   0.3    3.0   0.1
   Goodwill amortization...............................................   0.8     --    --
   Dividends from foreign subsidiaries.................................   3.8    3.5   0.9
   Foreign tax credit and payments.....................................  (2.4)   7.9   0.7
   Higher (lower) tax rates applicable to income of subsidiaries.......  (4.3)  (0.6)  0.3
   Foreign income exempted for income tax purpose......................  (0.8)    --    --
   Foreign tax assessment (refund).....................................  (1.0)  (1.1)   --
   Minority interests..................................................   4.0    1.1   1.9
   Change in valuation allowance.......................................  18.4    2.1  (4.9)
   Enacted change in tax rates.........................................    --  (22.1) (0.3)
   Realization of previously unrecognized tax benefits of subsidiaries. (16.9) (14.3) (1.7)
   Change in foreign exchange rate.....................................   0.3   (0.2)  1.5
   Other--net..........................................................   0.4    0.1   1.8
                                                                        -----  -----  ----
Effective income tax rate..............................................  35.4%  17.4% 38.3%
                                                                        =====  =====  ====
</TABLE>
--------
* In calculating the effective income tax rate for the fiscal year ended March
  31, 2002, the reconciling items were subtracted from the combined normal
  effective statutory tax rate since a loss before income tax benefit was
  recorded in that fiscal year.

The effective income tax rate of 38.3% for the fiscal year ended March 31, 2004
was approximately the same level with the normal effective statutory tax rate
of 38.0%. Although there was a 4.9 percentage points equivalent of downward
reconciliation due to the change in valuation allowance, the decrease was
substantially offset by some other upward reconciliations, including
reconciliations related to minority interests, change in foreign exchange rate,
dividends from foreign subsidiaries, and foreign tax credit and payments.

The effective income tax rate of 17.4% for the fiscal year ended March 31, 2003
was 20.6 percentage points lower than the normal effective statutory tax rate
of 38.0%. This lower tax rate primarily reflected an enacted change in tax rate
and realization of previously unrecognized tax benefits of subsidiaries. The
enacted change in tax rate resulted from the adoption of the consolidated
corporate-tax system and the new uniform local taxes, which introduced
value-added taxes as discussed above, and accounted for 22.1% in the
reconciliation above. The realization of previously unrecognized tax benefits
of subsidiaries primarily related to the liquidation of several of our domestic
subsidiaries with accumulated losses and accounted for 14.3% in the
reconciliation above.

Business Segment Analysis

We measure the performance of each of our business segments primarily in terms
of "operating profit" in accordance with the regulatory reporting requirements
of the Financial Services Agency. Operating profit and other segment
information are based on Japanese GAAP and are not consistent with our
financial statements prepared on the basis of US GAAP. For example, operating
profit under Japanese GAAP does not reflect items such as a part of provisions
(credit) for credit losses (primarily an equivalent of formula allowance under
US GAAP), foreign exchange gains (losses) and equity investment securities
gains (losses).

                                      61

<PAGE>

We maintain our business unit system based on customer and product
segmentation. Our major business units during the fiscal year ended March 31,
2004 were:

..   retail banking, which provides banking products and services to individual
    customers in Japan;

..   commercial banking, which provides banking products and services to large
    corporations and some small and medium-sized companies;

..   global corporate banking, which provides banking services to large Japanese
    corporations and their overseas operations as well as non-Japanese
    corporations who do business on a global basis, excluding UNBC's customers;

..   investment banking and asset management, which provides advisory and other
    services related to securities services of us, syndicated loans, project
    financing, derivatives and securitization and other investment banking
    activities, and which provides asset management and trust products and
    services mainly to high net worth individuals, branch customers and
    corporate clients in Japan;

..   UNBC, which includes our subsidiaries in California, UnionBanCal
    Corporation and Union Bank of California, N.A.;

..   operations services, which provides operations and settlement services to
    its other business units, including settlement and foreign exchange;

..   treasury, which conducts its asset and liability management and liquidity
    management; and

..   other, which consists of:

 .   systems services, which is responsible for its computer systems;

 .   eBusiness & IT Initiatives, which is responsible for developing
     information technology business opportunities;

 .   the corporate center, which retains functions such as strategic planning,
     overall risk management, internal auditing and compliance; and

 .   the elimination of duplicated amounts of net revenue among business
     segments.

Mitsubishi Securities is presented as a separate operating segment which
includes Mitsubishi Securities and its subsidiaries that provide a broad range
of retail and corporate securities services and products including retail
brokerage, securitization, M&A advisory and derivatives. After the
incorporation of Mitsubishi Securities on September 1, 2002, we transferred a
part of the investment banking business, including securitization, M&A advisory
and derivatives, to Mitsubishi Securities from our investment banking business
unit during the fiscal year ended March 31, 2003. This transfer of business did
not significantly affect the results of the investment banking business unit or
Mitsubishi Securities for the fiscal year ended March 31, 2003. We have not
reclassified the business segment information for the fiscal year ended March
31, 2002 to reflect such transfers as such reclassification was not practicable.

In May 2003, we integrated the investment banking business unit and the asset
management business unit into one business unit under the name of investment
banking and asset management business unit. Therefore, we have reclassified the
business segment information for the fiscal years ended March 31, 2002 and 2003
based on the current fiscal year's presentation.

Between May and July 2003, we transferred our overseas securities subsidiaries,
Tokyo-Mitsubishi International (Singapore) Ltd., Tokyo-Mitsubishi International
(HK) Limited, and Tokyo-Mitsubishi Securities (USA), Inc. to Mitsubishi
Securities. These overseas subsidiaries have since been renamed in line with
the name of Mitsubishi Securities, the parent company, to Mitsubishi Securities
(Singapore) Ltd., Mitsubishi Securities (HK) Limited, and Mitsubishi Securities
(USA), Inc., respectively. We have reclassified the business segment
information for the fiscal years ended March 31, 2002 and 2003 based on the
current fiscal year's presentation.

                                      62

<PAGE>

In July 2004, we transferred our overseas securities subsidiary,
Tokyo-Mitsubishi International plc, to Mitsubishi Securities. Tokyo-Mitsubishi
International plc has since been renamed in line with the name of its new
parent company, to Mitsubishi Securities International plc. Since the transfer
was made subsequent to March 31, 2004, we did not reclassify the business
segment information for the fiscal years ended March 31, 2002, 2003 and 2004 to
reflect this transfer.

In addition, we transferred our custody business, which had been included in
the asset management business unit, to the operations services unit during the
fiscal year ended March 31, 2004. Presentation for the fiscal years ended March
31, 2002 and 2003 has been reclassified to conform to the presentation for the
fiscal year ended March 31, 2004.

Furthermore, in the UNBC business unit, the measurement methods used to
determine reported segment profit or loss was changed for the fiscal year ended
March 31, 2004. Presentation for the fiscal years ended March 31, 2002 and 2003
has been reclassified to conform to the presentation for the fiscal year ended
March 31, 2004.

The following table shows the business segment information for the fiscal years
ended March 31, 2002, 2003 and 2004:

<TABLE>
<CAPTION>
                                                              Investment
                                                    Global    Banking and
                              Retail    Commercial Corporate     Asset               Operations            Mitsubishi
                              Banking    Banking    Banking   Management     UNBC     Services   Treasury  Securities
                             ---------- ---------- ---------- ----------- ---------- ---------- ---------- ----------
                                                                                (in billions)
<S>                          <C>        <C>        <C>        <C>         <C>        <C>        <C>        <C>
Fiscal year ended March 31,
 2002*:
   Net Revenue.............. (Yen)283.1 (Yen)297.7 (Yen)282.1 (Yen) 98.0  (Yen)289.5 (Yen)30.0  (Yen)207.1 (Yen) 16.9
   Operating expenses.......      230.6      126.8      134.6       55.4       157.3      22.9        28.4       25.7
                             ---------- ---------- ---------- ----------  ---------- ---------  ---------- ----------
   Operating profit (loss).. (Yen) 52.5 (Yen)170.9 (Yen)147.5 (Yen) 42.6  (Yen)132.2 (Yen) 7.1  (Yen)178.7 (Yen) (8.8)
                             ========== ========== ========== ==========  ========== =========  ========== ==========
Fiscal year ended March 31,
 2003*:
   Net Revenue.............. (Yen)280.0 (Yen)286.6 (Yen)262.9 (Yen) 82.6  (Yen)269.8 (Yen)25.6  (Yen)287.8 (Yen) 58.5
   Operating expenses.......      211.7      127.0      129.9       50.5       155.5      25.5        26.7       69.6
                             ---------- ---------- ---------- ----------  ---------- ---------  ---------- ----------
   Operating profit (loss).. (Yen) 68.3 (Yen)159.6 (Yen)133.0 (Yen) 32.1  (Yen)114.3 (Yen) 0.1  (Yen)261.1 (Yen)(11.1)
                             ========== ========== ========== ==========  ========== =========  ========== ==========
Fiscal year ended March 31,
 2004:
   Net Revenue.............. (Yen)302.9 (Yen)297.7 (Yen)246.4 (Yen)114.8  (Yen)253.5 (Yen)24.7  (Yen)186.3 (Yen)140.6
   Operating expenses.......      204.1      119.6      120.2       44.3       150.9      23.4        26.3      112.0
                             ---------- ---------- ---------- ----------  ---------- ---------  ---------- ----------
   Operating profit (loss).. (Yen) 98.8 (Yen)178.1 (Yen)126.2 (Yen) 70.5  (Yen)102.6 (Yen) 1.3  (Yen)160.0 (Yen) 28.6
                             ========== ========== ========== ==========  ========== =========  ========== ==========
</TABLE>
<TABLE>
<CAPTION>



                                Other        Total
                             -----------  ------------

<S>                          <C>          <C>
Fiscal year ended March 31,
 2002*:
   Net Revenue.............. (Yen) (58.3) (Yen)1,446.1
   Operating expenses.......        57.0         838.7
                             -----------  ------------
   Operating profit (loss).. (Yen)(115.3) (Yen)  607.4
                             ===========  ============
Fiscal year ended March 31,
 2003*:
   Net Revenue.............. (Yen) (88.1) (Yen)1,465.7
   Operating expenses.......        80.0         876.4
                             -----------  ------------
   Operating profit (loss).. (Yen)(168.1) (Yen)  589.3
                             ===========  ============
Fiscal year ended March 31,
 2004:
   Net Revenue.............. (Yen) (95.1) (Yen)1,471.8
   Operating expenses.......        40.7         841.5
                             -----------  ------------
   Operating profit (loss).. (Yen)(135.8) (Yen)  630.3
                             ===========  ============
</TABLE>
--------
* The segment information for the fiscal years ended March 31, 2002 and 2003
  was restated (except as stated above) to conform to the presentation for the
  fiscal year ended March 31, 2004.

                                      63

<PAGE>

When our business units work together to provide services to customers, we
assign the total amount of net revenue derived from those services to each
participating business unit without dividing the net revenue. As a result, some
items of net revenue are duplicated among the participating segments. The
duplicated amounts are eliminated in the "Other" column. The following is a
summary of the duplicated amounts between those segments. The total of such
duplicated amounts is included in "Other" in the table above.

<TABLE>
<CAPTION>
                                                              Global     Total
                                         Retail   Commercial Corporate   Amount
                                         Banking   Banking    Banking  Eliminated
                                         -------- ---------- --------- ----------
                                                      (in billions)
<S>                                      <C>      <C>        <C>       <C>
Fiscal year ended March 31, 2002:
 Investment Banking and Asset Management (Yen) -- (Yen) 7.8  (Yen)30.2 (Yen)38.0
                                         ======== =========  ========= =========
Fiscal year ended March 31, 2003:
 Investment Banking and Asset Management (Yen) -- (Yen) 9.7  (Yen)28.7 (Yen)38.4
                                         ======== =========  ========= =========
Fiscal year ended March 31, 2004:
 Investment Banking and Asset Management (Yen)0.3 (Yen)25.3  (Yen)38.0 (Yen)63.6
                                         ======== =========  ========= =========
</TABLE>

Fiscal Year Ended March 31, 2004 Compared to Fiscal Year Ended March 31, 2003

Total net revenue increased (Yen)6.1 billion, or 0.4%, from (Yen)1,465.7
billion for the fiscal year ended March 31, 2003 to (Yen)1,471.8 billion for
the fiscal year ended March 31, 2004. Net revenue increased (Yen)82.1 billion
at Mitsubishi Securities (reflecting, however, only seven months of fees and
commissions in the prior year) and (Yen)32.2 billion in the investment banking
and asset management business unit, while it decreased (Yen)101.5 billion in
the treasury unit.

Total operating expenses decreased (Yen)34.9 billion, or 4.0%, from (Yen)876.4
billion for the fiscal year ended March 31, 2003 to (Yen)841.5 billion for the
fiscal year ended March 31, 2004. This decrease was due mainly to a decrease of
(Yen)39.3 billion in the "Other" column, which primarily reflected a decrease
in the general provision for credit losses of (Yen)49.7 billion. Credit losses
are allocated to the corporate center rather than being reflected in each
business segment. Operating expenses also decreased (Yen)9.7 billion in the
global corporate banking unit. These decreases were partially offset by an
increase of (Yen)42.4 billion in Mitsubishi Securities.

Net revenue of the retail banking business unit increased (Yen)22.9 billion, or
8.2%, from (Yen)280.0 billion for the fiscal year ended March 31, 2003 to
(Yen)302.9 billion for the fiscal year ended March 31, 2004. This increase was
largely due to an increase in fee income of (Yen)11.2 billion, reflecting an
increase of fee income on insurance products and the investment trust business.

Net revenue of the commercial banking business unit increased (Yen)11.1
billion, or 3.9%, from (Yen)286.6 billion for the fiscal year ended March 31,
2003 to (Yen)297.7 billion for the fiscal year ended March 31, 2004. This
increase was due mainly to an increase of (Yen)13.6 billion in other income,
which primarily reflected an increase in derivatives sales and currency options
sales. This increase was partially offset by a decrease in net interest income
of (Yen)5.0 billion, reflecting our continued effort to reduce problem loans.

Net revenue of the global corporate banking business unit decreased (Yen)16.5
billion, or 6.3%, from (Yen)262.9 billion for the fiscal year ended March 31,
2003 to (Yen)246.4 billion for the fiscal year ended March 31, 2004. This
decrease was due mainly to the appreciation of the yen against the US dollar
and Asian currencies during the fiscal year ended March 31, 2004 compared to
that of the previous year.

Net revenue of the investment banking and asset management business unit
increased (Yen)32.2 billion, or 38.9%, from (Yen)82.6 billion for the fiscal
year ended March 31, 2003 to (Yen)114.8 billion for the fiscal year ended March
31, 2004. This increase was largely due to an increase of (Yen)16.6 billion in
other income, reflecting an increase in fees from sales of derivative products.

                                      64

<PAGE>

Net revenue of the UNBC business unit decreased (Yen)16.3 billion, or 6.0%,
from (Yen)269.8 billion for the fiscal year ended March 31, 2003 to (Yen)253.5
billion for the fiscal year ended March 31, 2004. This decrease was due mainly
to the appreciation of the yen against the US dollar at the end of UNBC's 2003
fiscal year compared to that of the previous year. In terms of the noon buying
rate of the Federal Reserve Bank of New York, the value of the yen against the
US dollar appreciated approximately 9.8%, from (Yen)118.75 on December 31, 2002
to (Yen)107.13 on December 31, 2003.

Net revenue of the operations services unit decreased (Yen)0.9 billion, or
3.6%, from (Yen)25.6 billion for the fiscal year ended March 31, 2003 to
(Yen)24.7 billion for the fiscal year ended March 31, 2004, due mainly to a
decline in revenue of our domestic subsidiaries.

Net revenue of the treasury unit decreased (Yen)101.5 billion, or 35.3%, from
(Yen)287.8 billion for the fiscal year ended March 31, 2003 to (Yen)186.3
billion for the fiscal year ended March 31, 2004. In the previous fiscal year,
the declining foreign currency interest rate environment was one of the primary
reasons for the increase in net revenue from foreign currency bond trading and
net interest income. In the fiscal year ended March 31, 2004, foreign currency
interest rates generally remained stable, causing a decline in such net revenue
compared to the previous fiscal year.

Net revenue of Mitsubishi Securities increased (Yen)82.1 billion, or 140.3%,
from (Yen)58.5 billion for the fiscal year ended March 31, 2003 to (Yen)140.6
billion for the fiscal year ended March 31, 2004. This increase was mainly
because only seven months of fees and commissions generated by KOKUSAI
Securities Co., Ltd., one of the predecessors of Mitsubishi Securities, were
recorded for the previous fiscal year, while its fees and commissions for
twelve months were recorded for the fiscal year ended March 31, 2004. In
addition, there was an increase in profits on trading of bonds and stocks and
an increase in commissions and fees in stock brokerage.

Fiscal Year Ended March 31, 2003 Compared to Fiscal Year Ended March 31, 2002

Total net revenue increased (Yen)19.6 billion, or 1.4%, from (Yen)1,446.1
billion for the fiscal year ended March 31, 2002 to (Yen)1,465.7 billion for
the fiscal year ended March 31, 2003. This increase was due mainly to an
increase of (Yen)80.7 billion in the treasury unit and an increase of (Yen)41.6
billion at Mitsubishi Securities, principally reflecting the merger that formed
Mitsubishi Securities. This increase was partially offset by a decrease of
(Yen)19.7 billion in the UNBC business unit.

Total operating expenses increased (Yen)37.7 billion, or 4.5%, from (Yen)838.7
billion for the fiscal year ended March 31, 2002 to (Yen)876.4 billion for the
fiscal year ended March 31, 2003. This increase was due mainly to an increase
of (Yen)43.9 billion in operating expenses for Mitsubishi Securities and an
increase of (Yen)23.0 billion in operating expenses included in the "Other"
column. The increase was partially offset by a decrease of (Yen)18.9 billion in
the retail banking business unit.

Net revenue of the retail banking business unit decreased (Yen)3.1 billion, or
1.1%, from (Yen)283.1 billion for the fiscal year ended March 31, 2002 to
(Yen)280.0 billion for the fiscal year ended March 31, 2003. This decrease was
mainly due to a decrease in net interest income of (Yen)10.9 billion,
reflecting a decline in interest margins due to declining interest rates in yen
and foreign currencies. The decrease was partially offset by an increase in net
fees of (Yen)6.1 billion, reflecting an increase in fee income on insurance
products and domestic funds transfers.

Net revenue of the commercial banking business unit decreased (Yen)11.1
billion, or 3.7%, from (Yen)297.7 billion for the fiscal year ended March 31,
2002 to (Yen)286.6 billion for the fiscal year ended March 31, 2003. This
decrease was mainly due to a decrease of (Yen)20.0 billion in net interest
income, which primarily reflected a decrease in volume of commercial loans and
a decrease in dividend income. The decrease in commercial loans was partly
attributable to the disposal of problem loans. The decrease in our dividend
income reflected the reduction in our holdings of strategic equity investments.
These decreases were partially offset by an increase in other income of
(Yen)4.6 billion, reflecting an increase in income on derivative products.

                                      65

<PAGE>

Net revenue of the global corporate banking business unit decreased (Yen)19.2
billion, or 6.8%, from (Yen)282.1 billion for the fiscal year ended March 31,
2002 to (Yen)262.9 billion for the fiscal year ended March 31, 2003. This
decrease was mainly due to a decrease of (Yen)11.1 billion in net interest
income and a decrease in net revenue of subsidiaries of (Yen)10.1 billion. The
decrease in net interest income reflected a decline in interest margins on
loans and deposits in the declining interest rate environment in Japan and
foreign countries and the decrease in net revenue of its subsidiaries reflected
a decrease in interest income in our overseas subsidiaries in the declining
interest rate environment.

Net revenue of the investment banking and asset management business unit
decreased (Yen)15.4 billion, or 15.7%, from (Yen)98.0 billion for the fiscal
year ended March 31, 2002 to (Yen)82.6 billion for the fiscal year ended March
31, 2003. This decrease was mainly due to a decrease of (Yen)10.1 billion in
net revenue of its subsidiaries in the former investment banking unit,
reflecting depressed securities trading operations in its overseas
subsidiaries. This decrease was also due to a decrease of (Yen)9.7 billion in
other income of the former asset management business unit, which primarily
reflected a decrease in gains on trust funds and investment trusts due to
declining stock markets in Japan.

Net revenue of the UNBC business unit decreased (Yen)19.7 billion, or 6.8%,
from (Yen)289.5 billion for the fiscal year ended March 31, 2002 to (Yen)269.8
billion for the fiscal year ended March 31, 2003. This decrease was largely due
to the appreciation of the yen against the US dollar at the end of UNBC's 2002
fiscal year compared to that of the previous year.

Net revenue of the operations services unit decreased (Yen)4.4 billion, or
14.6%, from (Yen)30.0 billion for the fiscal year ended March 31, 2002 to
(Yen)25.6 billion for the fiscal year ended March 31, 2003, mainly due to a
decline in revenue of its domestic subsidiaries.

Net revenue of the treasury unit increased (Yen)80.7 billion, or 39.0%, from
(Yen)207.1 billion for the fiscal year ended March 31, 2002 to (Yen)287.8
billion for the fiscal year ended March 31, 2003. This increase was mainly due
to an increase in interest income and other income, which primarily reflected
an increase in gains on investments in domestic and foreign bonds and an
increase in gains on its foreign currency asset and liability management
operations reflecting a decline in foreign currency interest rates.

Net revenue of Mitsubishi Securities increased (Yen)41.6 billion, or 245.8%,
from (Yen)16.9 billion for the fiscal year ended March 31, 2002 to (Yen)58.5
billion for the fiscal year ended March 31, 2003. This increase was mainly due
to the merger that formed Mitsubishi Securities on September 1, 2002. There was
no revenue of KOKUSAI Securities Co., Ltd. recorded for the fiscal year ended
March 31, 2002 because we accounted for our investment in this company under
the equity method and did not consolidate it.

The increase in operating expenses in the "Other" column primarily reflected a
significant decrease in the provision for credit losses. Credit losses are
allocated to the corporate center rather than being reflected in each business
segment.

                                      66

<PAGE>

Geographic Segment Analysis

The following table sets forth our total revenue, income (loss) from continuing
operations before income tax expense (benefit) and cumulative effect of a
change in accounting principle and net income (loss) on a geographic basis,
based principally on the domicile of activities for the fiscal years ended
March 31, 2002, 2003 and 2004:

<TABLE>
<CAPTION>
                                                                                  Fiscal years ended March 31,
                                                                             ---------------------------------------
                                                                                 2002          2003         2004
                                                                             ------------  ------------ ------------
                                                                                          (in billions)
<S>                                                                          <C>           <C>          <C>
Total revenue (interest income and non-interest income):
   Domestic................................................................. (Yen)  828.0  (Yen)1,025.5 (Yen)1,309.1
                                                                             ------------  ------------ ------------
   Foreign:
       United States........................................................        557.9         455.9        396.5
       Europe...............................................................        235.4         292.2        217.0
       Asia/Oceania excluding Japan.........................................        239.3         131.4         72.0
       Other areas*.........................................................        120.5          80.3        108.7
                                                                             ------------  ------------ ------------
          Total foreign.....................................................      1,153.1         959.8        794.2
                                                                             ------------  ------------ ------------
              Total......................................................... (Yen)1,981.1  (Yen)1,985.3 (Yen)2,103.3
                                                                             ============  ============ ============
Income (loss) from continuing operations before income tax expense (benefit)
  and cumulative effect of a change in accounting principle:
   Domestic................................................................. (Yen) (394.2) (Yen)   18.2 (Yen)  601.2
                                                                             ------------  ------------ ------------
   Foreign:
       United States........................................................         35.9          86.1         31.7
       Europe...............................................................         42.6         114.6        146.9
       Asia/Oceania excluding Japan.........................................         54.0          48.0         52.0
       Other areas*.........................................................         45.4          22.7         40.0
                                                                             ------------  ------------ ------------
          Total foreign.....................................................        177.9         271.4        270.6
                                                                             ------------  ------------ ------------
              Total......................................................... (Yen) (216.3) (Yen)  289.6 (Yen)  871.8
                                                                             ============  ============ ============
Net income (loss):
   Domestic................................................................. (Yen) (282.6) (Yen)   22.0 (Yen)  370.1
                                                                             ------------  ------------ ------------
   Foreign:
       United States........................................................         11.4          55.6         25.7
       Europe...............................................................         46.1         112.2         90.3
       Asia/Oceania excluding Japan.........................................         50.0          37.8         30.9
       Other areas*.........................................................         42.4          21.4         20.6
                                                                             ------------  ------------ ------------
          Total foreign.....................................................        149.9         227.0        167.5
                                                                             ------------  ------------ ------------
              Total......................................................... (Yen) (132.7) (Yen)  249.0 (Yen)  537.6
                                                                             ============  ============ ============
</TABLE>
--------
* Other areas primarily include Canada, Latin America and the Caribbean

Fiscal Year Ended March 31, 2004 Compared to Fiscal Year Ended March 31, 2003

Domestic total revenue increased (Yen)283.6 billion, or 27.7%, from
(Yen)1,025.5 billion for the fiscal year ended March 31, 2003 to (Yen)1,309.1
billion for the fiscal year ended March 31, 2004. This increase primarily
reflected increases in net investment securities gains and net foreign exchange
gains. The increase was partially offset by a decrease in net trading account
profits.

                                      67

<PAGE>

Foreign total revenue decreased (Yen)165.6 billion, or 17.3%, from (Yen)959.8
billion for the fiscal year ended March 31, 2003 to (Yen)794.2 billion for the
fiscal year ended March 31, 2004. This decrease primarily reflected decreases
in net investment securities gains and interest income. The decrease was
partially offset by an increase in net foreign exchange gains.

Domestic income from continuing operations before income tax expense and
cumulative effect of a change in accounting principle increased (Yen)583.0
billion, or 3,203.1%, from (Yen)18.2 billion for the fiscal year ended March
31, 2003 to (Yen)601.2 billion for the fiscal year ended March 31, 2004. In
addition to the above mentioned increase in revenue, a reversal of allowance
for credit losses contributed to the marked increase in income from continuing
operations before income tax expense and cumulative effect of a change in
accounting principle.

Foreign income from continuing operations before income tax expense and
cumulative effect of a change in accounting principle for the fiscal year ended
March 31, 2004 was (Yen)270.6 billion, representing substantially the same
level compared to (Yen)271.4 billion for the fiscal year ended March 31, 2003.
Although the foreign total revenue decreased as noted above, a decrease in
interest expense as well as an improvement in the provision for credit losses
offset the decrease in revenue.

Fiscal Year Ended March 31, 2003 Compared to Fiscal Year Ended March 31, 2002

Domestic total revenue increased (Yen)197.5 billion, or 23.8%, from (Yen)828.0
billion for the fiscal year ended March 31, 2002 to (Yen)1,025.5 billion for
the fiscal year ended March 31, 2003. This increase primarily reflected
increases in net trading profit and foreign exchange gains. The increase was
partially offset by a decrease in interest income.

Foreign total revenue decreased (Yen)193.3 billion, or 16.8%, from (Yen)1,153.1
billion for the fiscal year ended March 31, 2002 to (Yen)959.8 billion for the
fiscal year ended March 31, 2003. This decrease primarily reflected a decrease
in interest income. The decrease was partially offset by increases in net
investment securities gains and net foreign exchange gains.

Domestic income (loss) from continuing operations before income tax expense
(benefit) and cumulative effect of a change in accounting principle increased
(Yen)412.4 billion, from (Yen)394.2 billion of domestic loss from continuing
operations before income tax benefit and cumulative effect of a change in
accounting principle for the fiscal year ended March 31, 2002 to (Yen)18.2
billion of domestic income from continuing operations before income tax expense
and cumulative effect of a change in accounting principle for the fiscal year
ended March 31, 2003. This increase was due to primarily a decrease in the
provision for loan losses and an increase in net trading account profits.

Foreign income from continuing operations before income tax expense and
cumulative effect of a change in accounting principle increased (Yen)93.5
billion, or 52.6%, from (Yen)177.9 billion for the fiscal year ended March 31,
2002 to (Yen)271.4 billion for the fiscal year ended March 31, 2003. This
increase primarily reflected increases in net investment securities gains and
net foreign exchange gains.

Effect of the Change in Exchange Rates on Foreign Currency Translation

The average exchange rate for the fiscal year ended March 31, 2004 was
(Yen)113.07 per $1.00, compared to the prior fiscal year's average exchange
rate of (Yen)121.94 yen per $1.00. The average exchange rate for the conversion
of the US dollar financial statements of some of our foreign subsidiaries for
the fiscal year ended December 31, 2003 was (Yen)115.98 per $1.00, compared to
the average exchange rate for the fiscal year ended December 31, 2002 of
(Yen)125.34 per $1.00.

The change in the average exchange rate of the yen against the US dollar and
other foreign currencies resulted in translation losses on total revenue of
approximately (Yen)39 billion, net interest income of approximately (Yen)19
billion and income before income taxes of approximately (Yen)15 billion for the
fiscal year ended March 31, 2004.

                                      68

<PAGE>

B. Liquidity and Capital Resources

Financial Condition

Total Assets

Our total assets at March 31, 2004 were (Yen)85.06 trillion, representing an
increase of (Yen)7.38 trillion, from (Yen)77.68 trillion at March 31, 2003.
This increase was due primarily to an increase of (Yen)4.59 trillion in
investment securities and an increase of (Yen)3.05 trillion in receivables
under securities borrowing transactions. This increase was partially offset by
a decrease of (Yen)1.00 trillion in cash and due from banks.

We have allocated a substantial portion of our assets to international
activities. As a result, reported amounts are affected by changes in the value
of the yen against the US dollar and other foreign currencies. Foreign assets
are denominated primarily in US dollars. The following table shows our total
assets at March 31, 2003 and 2004 by geographic region based principally on the
domicile of the obligors:

<TABLE>
<CAPTION>
                                                  At March 31,
                                              ---------------------
                                                 2003       2004
                                              ---------- ----------
                                                 (in trillions)
             <S>                              <C>        <C>
             Japan........................... (Yen)56.68 (Yen)66.42
                                              ---------- ----------
             Foreign:
                United States of America.....      10.29       9.52
                Europe.......................       5.89       4.63
                Asia/Oceania excluding Japan.       2.99       2.73
                Other areas*.................       1.83       1.76
                                              ---------- ----------
                Total foreign................      21.00      18.64
                                              ---------- ----------
                    Total.................... (Yen)77.68 (Yen)85.06
                                              ========== ==========
</TABLE>
--------
* Other areas primarily include Canada, Latin America and the Caribbean.

At March 31, 2004, the noon buying rate of the Federal Reserve Bank of New York
was (Yen)104.18 per $1.00, as compared with (Yen)118.07 per $1.00 at March 31,
2003. The yen equivalent amount of foreign currency denominated assets and
liabilities increases as the relevant exchange rate indicating the yen value
per one foreign currency unit becomes higher, evidencing a "weaker" yen, and
decreases as the relevant exchange rate indicating the yen value per one
foreign currency unit becomes lower, evidencing a "stronger" yen. The
appreciation of the yen against the US dollar and other foreign currencies
during the fiscal year ended March 31, 2004 decreased the yen value of our
total assets by approximately (Yen)1.93 trillion. See "Item 3.A. Key
Information--Selected Financial Data--Exchange Rate Information."

                                      69

<PAGE>

Loan Portfolio

The following table sets forth our loans outstanding, before deduction of
allowance for credit losses, at March 31, 2003 and 2004, based on
classification by industry segment as defined by the Bank of Japan for
regulatory reporting purposes, which is not necessarily based on the use of
proceeds:

<TABLE>
<CAPTION>
                                                          At March 31,
                                                  ---------------------------
                                                      2003           2004
                                                  ------------- -------------
                                                         (in billions)
 <S>                                              <C>           <C>
 Domestic:
    Manufacturing................................ (Yen) 4,714.7 (Yen) 4,692.4
    Construction.................................         995.9         832.8
    Real estate..................................       3,245.7       3,515.7
    Services.....................................       4,249.1       3,661.8
    Wholesale and retail.........................       4,723.0       4,312.0
    Banks and other financial institutions.......       1,800.6       1,765.4
    Communication and information services.......       1,264.7         651.0
    Other industries.............................       2,644.9       4,750.5
    Consumer.....................................       6,994.2       7,474.0*
                                                  ------------- -------------
        Total domestic...........................      30,632.8      31,655.6
                                                  ------------- -------------
 Foreign:
    Governments and official institutions........         227.7         178.4
    Banks and other financial institutions.......         777.7         904.8
    Commercial and industrial....................       8,127.3       7,063.0
    Other........................................         267.3         156.4
                                                  ------------- -------------
        Total foreign............................       9,400.0       8,302.6
                                                  ------------- -------------
           Total.................................      40,032.8      39,958.2
                                                  ------------- -------------
 Less unearned income and deferred loan fees--net          40.4          27.2
                                                  ------------- -------------
           Total................................. (Yen)39,992.4 (Yen)39,931.0
                                                  ============= =============
</TABLE>
--------
 * Domestic loans within the "consumer" category in the above table include
   loans to individuals who utilize loan proceeds to finance their proprietor
   activities and not for their personal financing needs. During the fiscal
   year ended March 31, 2004, our credit administration system was upgraded and
   we are now able to present a precise breakdown of the balance of such
   consumer loans at March 31, 2004 by the type of proprietor business, as
   presented below:

<TABLE>
<CAPTION>
                                                             Banks and   Communication               Total
                                                               other          and                   included
                              Real               Wholesale   financial    information    Other         in
Manufacturing Construction   estate    Services  and retail institutions   services    industries   Consumer
------------- ------------ ---------- ---------- ---------- ------------ ------------- ---------- ------------
                                                (in billions)
<S>           <C>          <C>        <C>        <C>        <C>          <C>           <C>        <C>
  (Yen)28.2    (Yen)19.3   (Yen)738.4 (Yen)230.7 (Yen)52.3    (Yen)1.2     (Yen)4.1    (Yen)10.6  (Yen)1,084.8
</TABLE>

   Since the system upgrade was effective during the fiscal year ended March
   31, 2004, no equivalent information is obtainable for prior fiscal year-end
   dates.

Loans are our primary use of funds. The average loan balance accounted for
59.5% of total interest-earning assets for the fiscal year ended March 31, 2003
and 55.7% for the fiscal year ended March 31, 2004.

At March 31, 2004, our total loans were (Yen)39.93 trillion, representing a
decrease of (Yen)0.06 trillion, or 0.2%, from (Yen)39.99 trillion at March 31,
2003. Before the deduction of unearned income and deferred loan fees--net, our
loan

                                      70

<PAGE>

balance at March 31, 2004, consisted of (Yen)31.66 trillion of domestic loans
and (Yen)8.30 trillion of foreign loans while the loan balance at March 31,
2003, consisted of (Yen)30.63 trillion of domestic loans and (Yen)9.40 trillion
of foreign loans.

Domestic loans increased (Yen)1.03 trillion and foreign loans decreased
(Yen)1.10 trillion. With respect to domestic loans, despite a significant
decrease in nonperforming loans due to disposal, the total loan balance
increased, reflecting an increase in consumer loans, as we promoted residential
mortgage loans, and an increase in loans to other industries, mainly to the
public sector, through increasing loans to Japanese government and related
institutions, which have comparatively lower credit risk, as a part of our
effective use of funds.

Foreign loans decreased due to a decrease in the loan balance of UnionBanCal
Corporation, our largest overseas subsidiary, and due to the appreciation of
the yen against the US dollar and other foreign currencies. UnionBanCal
Corporation pursued its strategy to increase its consumer loan and increased
residential mortgage loans. However, the total loans decreased because of a
decrease in loans to industries.

Allowance for Credit Losses, Nonperforming and Past Due Loans

The following table shows a summary of the changes in the allowance for credit
losses for the fiscal years ended March 31, 2002, 2003 and 2004:

<TABLE>
<CAPTION>
                                             Fiscal year ended March 31,
                                      ----------------------------------------
                                          2002          2003          2004
                                      ------------  ------------  ------------
                                                    (in billions)
 <S>                                  <C>           <C>           <C>
 Balance at beginning of fiscal year. (Yen)1,385.0  (Yen)1,341.6  (Yen)1,058.6
                                      ------------  ------------  ------------
 Provision (credit) for credit losses        466.9         287.3        (142.4)
                                      ------------  ------------  ------------
 Charge-offs:
    Domestic.........................       (406.7)       (523.9)       (206.9)
    Foreign..........................       (107.3)       (116.2)        (70.8)
                                      ------------  ------------  ------------
        Total........................       (514.0)       (640.1)       (277.7)
 Recoveries:
    Domestic.........................         30.9          49.1          11.3
    Foreign..........................         17.9          17.6          18.7
                                      ------------  ------------  ------------
        Total........................         48.8          66.7          30.0
                                      ------------  ------------  ------------
 Net charge-offs.....................       (465.2)       (573.5)       (247.7)
 Deconsolidation of Nippon Trust Bank        (57.5)           --            --
 Others*.............................         12.4           3.2         (19.2)
                                      ------------  ------------  ------------
 Balance at end of fiscal year....... (Yen)1,341.6  (Yen)1,058.6  (Yen)  649.3
                                      ============  ============  ============
</TABLE>
--------
* Others principally include foreign currency translation and discontinued
  operations adjustments.

We have been actively working on disposing nonperforming loans. We met the
guideline for the disposal of nonperforming loans, which was based on a
Japanese regulation established under the program for financial revival
announced by the Japanese government in October 2002. Under the program, the
FSA stated that it would strive to normalize the problems with nonperforming
loans by March 31, 2005, by reducing major Japanese banks' ratio of
nonperforming loans to total loans by about half.

For the fiscal year ended March 31, 2004, we recorded a reversal of allowance
of (Yen)142.4 billion due to a significant decrease in our specific allowance
for nonperforming loans reflecting a decline in such loan balances, and a gain
in connection with loan sales, as the loans' sales price exceeded the loan
balance, net of allowances.

                                      71

<PAGE>

The following table presents comparative data in relation to the principal
amount of nonperforming loan sold and additional provision for credit losses.

<TABLE>
<CAPTION>
                                                                               Additional
                                                                               provision
                                                                               for credit
                                          Principal    Allowance    Loans,       losses
                                            amount     for credit   net of    (reversal of
                                         of loans/(1)/ losses/(2)/ allowance   allowance)
                                         ------------  ----------  ---------- ------------
                                                          (in billions)
<S>                                      <C>           <C>         <C>        <C>
For the fiscal year ended March 31, 2002  (Yen)200.3   (Yen)128.5  (Yen) 71.8  (Yen)14.4
For the fiscal year ended March 31, 2003       580.7        266.3       314.4       36.7
For the fiscal year ended March 31, 2004       292.8        125.5       167.3       (5.6)
</TABLE>
--------
(1) Represents principal amount after the deduction of charge-offs made before
    the sales of nonperforming loans.
(2) Represents allowance for credit losses at the latest balance sheet date.

The sales of nonperforming loans resulted in additional provisions for credit
losses of (Yen)36.7 billion for the fiscal year ended March 31, 2003 and
reversal of allowance of (Yen)5.6 billion for the fiscal year ended March 31,
2004.

Through the sale of nonperforming loans to the Resolution and Collection
Corporation and to other third parties, additional provisions or gains may
arise from factors such as a change in the credit quality of borrowers or the
value of the underlying collateral subsequent to the prior reporting date, and
the risk appetite and investment policy of the purchasers. For the fiscal year
ended March 31, 2003, we recorded additional provisions of (Yen)36.7 billion
because the unexpected adverse change in borrowers' credit-worthiness was
severe. However, during the fiscal year ended March 31, 2004, we realized a
gain of (Yen)5.6 billion because there was no such change and the conditions
surrounding the sales of loans improved.

Due to the inherent uncertainty of factors that may affect negotiated prices,
which reflect the borrowers' financial condition, and the value of underlying
collateral, the results during the reported periods are not necessarily
indicative of the results that we may record in the future.

In the fiscal years ended March 31, 2003 and 2004, we also sold loans that were
not recorded as nonperforming in aggregate principal amounts of (Yen)13.8
billion and (Yen)5.6 billion, respectively, and recorded additional provisions
for credit losses of (Yen)0.5 billion and (Yen)0.1 billion, respectively, in
connection with those sales. Although not categorized as nonperforming as of
the most recent balance sheet date, most of these loans had suffered a decline
in their credit quality as of the date of their sale and were sold as a
precautionary measure to avoid further declines in the value of the loans and
to avoid additional losses in the future.

We incurred additional provisions of (Yen)37.2 billion in connection with the
sale of loans including performing loans for the fiscal year ended March 31,
2003, and recorded a gain of (Yen)5.5 billion for the fiscal year ended
March 31, 2004.

Charge-offs for the fiscal year ended March 31, 2004 were (Yen)277.7 billion, a
decrease of (Yen)362.4 billion, or 56.6%, from (Yen)640.1 billion for the
fiscal year ended March 31, 2003. For the fiscal year ended March 31, 2003,
charge-offs were particularly high because we accelerated the disposal of
nonperforming loans to meet the governmental policy for disposal of such loans,
and to improve our loan portfolio. However, for the fiscal year ended March 31,
2004, charge-offs significantly decreased because the amount of nonperforming
loans we disposed of was not large compared to the prior period, and because
the business environment in Japan generally improved as evidenced by the
decrease in bankruptcy filings. Charge-offs of domestic nonperforming loans
decreased in all industries, led by a decrease of (Yen)134.2 billion in real
estate, in which charge-offs were particularly large for the fiscal year ended
March 31, 2003.

                                      72

<PAGE>

The following table summarizes the allowance for credit losses by component at
each fiscal year-end:

<TABLE>
<CAPTION>
                                                                      At March 31,
                                                          ------------------------------------
                                                              2002         2003        2004
                                                          ------------ ------------ ----------
                                                                     (in billions)
<S>                                                       <C>          <C>          <C>
Allocated allowance:
   Specific--specifically identified problem loans....... (Yen)  983.8 (Yen)  675.8 (Yen)380.9
   Large groups of smaller balance homogeneous loans.....         37.9         37.5       38.8
   Loans exposed to specific country risk................         27.1         12.5        5.9
   Formula--substandard, special mention and other loans.        270.2        309.5      205.2
Unallocated allowance....................................         22.6         23.3       18.5
                                                          ------------ ------------ ----------
   Total allowance....................................... (Yen)1,341.6 (Yen)1,058.6 (Yen)649.3
                                                          ============ ============ ==========
</TABLE>

Allowance policy

Our credit rating system is closely linked to the risk grading standards set by
the Japanese regulatory authorities for asset evaluation and assessment, and is
used as a basis for establishing the allowance for credit losses and
charge-offs. The categorization is based on conditions that may affect the
ability of borrowers to service their debt, such as current financial condition
and results of operations, historical payment experience, credit documentation,
other public information and current trends. For a discussion of our credit
rating system, see "Item 11. Quantitative and Qualitative Disclosures about
Credit, Market and Other Risk--Credit Risk Management--Credit Rating System."

Change in total allowance and provision for credit losses

At March 31, 2004, the total allowance for credit losses was (Yen)649.3
billion, or 1.63% of our total loan portfolio and 52.82% of our total
nonaccrual and restructured loans and accruing loans contractually past due 90
days or more. At March 31, 2003, the total allowance for credit losses was
(Yen)1,058.6 billion, or 2.65% of our total loan portfolio and 50.04% of our
total nonaccrual and restructured loans and accruing loans contractually past
due 90 days or more.

During the fiscal years ended March 31, 2002, 2003 and 2004, there were no
significant additions to the allowance for credit losses resulting from
directives, advice or counsel from governmental or regulatory bodies.

The provision for credit losses decreased consistently from the fiscal year
ended March 31, 2002 to the fiscal year ended March 31, 2004. In particular,
for the fiscal year ended March 31, 2004, we recorded a reversal of allowance
for credit losses due to a decrease of allocated allowance for specifically
identified problem loans as our nonperforming loans decreased, and due to a
decrease of formula allowance as we reduced some performing loans, for which
credit risk and percentage of allowance were comparatively high.

Allocated allowance for specifically identified problem loans

The allocated credit loss allowance for specifically identified problem loans
represents the allowance against impaired loans called for in SFAS No. 114,
"Accounting by Creditors for Impairment of a Loan." Impaired loans primarily
include nonaccrual loans and restructured loans. We generally discontinue
accrual of interest income on loans when substantial doubt exists as to the
full and timely collection of either principal or interest, or when principal
or interest is contractually past due one month or more with respect to loans
made by us or by certain domestic subsidiaries, and 90 days or more with
respect to loans of certain foreign subsidiaries. Loans are classified as
restructured loans when we grant a concession to the borrowers for economic or
legal reasons related to the borrowers' financial difficulties. Detailed
reviews of impaired loans are performed on a daily basis

                                      73

<PAGE>

after a borrower's annual or semi-annual financial statements first become
available. In addition, as part of an ongoing credit review process, our credit
officers monitor changes in all customers' creditworthiness including
bankruptcy, past due principal or interest, downgrading of external credit
rating, declining stock price, business restructuring and other events and
reassesses borrowers' ratings in response to such events. This credit
monitoring process form an integral part of our overall control process. An
impaired loan is evaluated individually based on the present value of expected
future cash flows discounted at the loan's effective interest rate, the loan's
observable market price or the fair value of the collateral if the loan is
collateral-dependent at a balance-sheet date.

                                      74

<PAGE>

The following table summarizes nonaccrual and restructured loans, and accruing
loans that are contractually past due 90 days or more as to principal or
interest payments, at March 31, 2002, 2003 and 2004:

<TABLE>
<CAPTION>
                                                                                    At March 31,
                                                     -------------------------------------------------------------------------
                                                          2002                  2003                          2004
                                                     -------------- ----------------------------  ----------------------------
                                                          Old            Old            New            Old            New
                                                     classification classification classification classification classification
                                                     -------------- -------------- -------------- -------------- --------------
                                                                         (in billions, except percentages)
<S>                                                  <C>            <C>            <C>            <C>            <C>
Nonaccrual loans:
   Domestic:
       Manufacturing................................ (Yen)   115.4  (Yen)    74.6  (Yen)    73.6  (Yen)    99.1  (Yen)    98.9
       Construction.................................         142.9           63.0           63.0           42.6           42.6
       Real estate..................................         511.4          198.8          198.8          125.4          125.4
       Services.....................................         149.5           63.8           65.5           34.7           39.5
       Wholesale and retail.........................         223.8          209.6          195.4           93.6           84.1
       Banks and other financial institutions.......          46.1           15.0           15.0           15.8           15.8
       Communication and information
         services...................................            --             --           13.9             --            5.1
       Other industries.............................          27.3           31.3           30.9           14.7           14.5
       Consumer.....................................         157.2          147.1          147.1          137.7          137.7*
                                                     -------------  -------------  -------------  -------------  -------------
          Total domestic............................       1,373.6          803.2          803.2          563.6          563.6
   Foreign..........................................         233.8          265.9          265.9          226.9          226.9
                                                     -------------  -------------  -------------  -------------  -------------
          Total nonaccrual loans....................       1,607.4        1,069.1        1,069.1          790.5          790.5
                                                     -------------  -------------  -------------  -------------  -------------
Restructured loans:
   Domestic:
       Manufacturing................................         249.5          151.9          149.1           42.9           42.6
       Construction.................................          94.7           64.0           64.0            9.1            9.1
       Real estate..................................         369.8          245.9          245.9          114.9          114.9
       Services.....................................         187.0          104.3          118.8           34.2           42.3
       Wholesale and retail.........................         415.1          260.6          241.2          122.4          112.7
       Banks and other financial institutions.......          40.7           15.0           15.0             --             --
       Communication and information
         services...................................            --             --           11.1             --            4.7
       Other industries.............................          61.3           28.7           25.3            6.7            3.9
       Consumer.....................................         103.9           74.9           74.9           50.9           50.9*
                                                     -------------  -------------  -------------  -------------  -------------
          Total domestic............................       1,522.0          945.3          945.3          381.1          381.1
   Foreign..........................................          97.1           83.2           83.2           45.7           45.7
                                                     -------------  -------------  -------------  -------------  -------------
          Total restructured loans..................       1,619.1        1,028.5        1,028.5          426.8          426.8
                                                     -------------  -------------  -------------  -------------  -------------
Accruing loans contractually past due 90 days or
  more:
   Domestic.........................................          15.0           15.2           15.2           11.1           11.1
   Foreign..........................................           2.8            2.9            2.9            0.9            0.9
                                                     -------------  -------------  -------------  -------------  -------------
          Total accruing loans contractually
            past due 90 days or more................          17.8           18.1           18.1           12.0           12.0
                                                     -------------  -------------  -------------  -------------  -------------
          Total..................................... (Yen) 3,244.3  (Yen) 2,115.7  (Yen) 2,115.7  (Yen) 1,229.3  (Yen) 1,229.3
                                                     =============  =============  =============  =============  =============
          Total loans............................... (Yen)41,012.2  (Yen)39,992.4  (Yen)39,992.4  (Yen)39,931.0  (Yen)39,931.0
                                                     =============  =============  =============  =============  =============
Nonaccrual and restructured loans, and accruing
  loans contractually past due 90 days or more as a
  percentage of total loans.........................          7.91%          5.29%          5.29%          3.08%          3.08%
                                                     =============  =============  =============  =============  =============
</TABLE>

                                      75

<PAGE>

--------
 * Domestic loans within the "consumer" category in the above table include
   loans to individuals who utilize loan proceeds to finance their proprietor
   activities and not for their personal financing needs. During the fiscal
   year ended March 31, 2004, our credit administration system was upgraded and
   we are now able to present a precise breakdown of the balance of such
   consumer loans at March 31, 2004 by the type of proprietor business. Such
   breakdown is presented below in accordance with our new classification:

<TABLE>
<CAPTION>
                                                                              Banks and   Communication             Total
                                                                                other          and                 included
                                                Real              Wholesale   financial    information    Other       in
                   Manufacturing Construction  estate   Services  and retail institutions   services    industries Consumer
                   ------------- ------------ --------- --------- ---------- ------------ ------------- ---------- ---------
                                                                 (in billions)
<S>                <C>           <C>          <C>       <C>       <C>        <C>          <C>           <C>        <C>
Nonaccrual loans..   (Yen)1.6      (Yen)0.9   (Yen)52.3 (Yen)14.2  (Yen)5.8       --        (Yen)0.2        --     (Yen)75.0
Restructured loans        1.0           0.3        21.0       4.1       1.5       --              --        --          27.9
</TABLE>

   Since the system upgrade was effective during the fiscal year ended March
   31, 2004, no equivalent information is obtainable for prior fiscal year-end
   dates.

The Bank of Japan changed its industry segment classification during the fiscal
year ended March 31, 2003. For the purpose of comparison, the information as of
March 31, 2003 and 2004 includes both loans outstanding by type of industry
based on the prior fiscal years' industry segment classifications and the new
industry segment classifications.

Total nonaccrual loans were (Yen)790.5 billion at March 31, 2004, a decrease of
(Yen)278.6 billion, or 26.1%, from (Yen)1,069.1 billion at March 31, 2003. This
decrease was largely attributable to a decrease of (Yen)111.3 billion in
domestic nonaccrual loans to borrowers in the wholesale and retail industry and
a decrease of (Yen)73.4 billion in domestic nonaccrual loans to borrowers in
the real estate industry. These decreases principally reflected sales and
charge-offs of such loans during the fiscal year ended March 31, 2004.

Total restructured loans were (Yen)426.8 billion at March 31, 2004, a decrease
of (Yen)601.7 billion, or 58.5%, from (Yen)1,028.5 billion at March 31, 2003.
Restructured loans to most industry segments decreased substantially during the
fiscal year ended March 31, 2004. The reasons are as follows:

..   The amount of newly identified nonperforming loans significantly decreased
    because of the general upturn in the Japanese economy as evidenced by the
    decrease in bankruptcy filings.

..   Many borrowers were upgraded mainly through our policy to support the
    borrowers' revival efforts.

..   We also made efforts to reduce nonperforming loans through collection.

The following table summarizes the balances of impaired loans and related
impairment allowances at March 31, 2002, 2003 and 2004, excluding
smaller-balance homogeneous loans:

<TABLE>
<CAPTION>
                                                                        At March 31,
                                         --------------------------------------------------------------------------
                                                   2002                     2003                     2004
                                         ------------------------ ------------------------ ------------------------
                                             Loan      Impairment     Loan      Impairment     Loan      Impairment
                                            balance    allowance     balance    allowance     balance    allowance
                                         ------------  ---------- ------------  ---------- ------------  ----------
                                                                       (in billions)
<S>                                      <C>           <C>        <C>           <C>        <C>           <C>
Requiring an impairment allowance....... (Yen)2,757.5  (Yen)978.5 (Yen)1,855.6  (Yen)675.8 (Yen)  972.7  (Yen)380.9
Not requiring an impairment
  allowance.............................        372.7          --        133.0          --        144.7          --
                                         ------------  ---------- ------------  ---------- ------------  ----------
   Total................................ (Yen)3,130.2  (Yen)978.5 (Yen)1,988.6  (Yen)675.8 (Yen)1,117.4  (Yen)380.9
                                         ============  ========== ============  ========== ============  ==========
Percentage of the allocated allowance to
  total impaired loans..................         31.3%                    34.0%                    34.1%
                                         ============             ============             ============
</TABLE>

                                      76

<PAGE>

In addition to impaired loans presented in the above table, there were loans
held for sale that were impaired of (Yen)3.2 billion, (Yen)3.2 billion and
(Yen)9.7 billion at March 31, 2002, 2003 and 2004, respectively.

Impaired loans decreased (Yen)871.2 billion, or 43.8%, from (Yen)1,988.6
billion at March 31, 2003 to (Yen)1,117.4 billion at March 31, 2004, reflecting
decreases in nonaccrual loans and restructured loans as set forth above.

The percentage of the allocated allowance to total impaired loans at March 31,
2004 was 34.1%, an increase of 0.1 percentage points from 34.0% at March 31,
2003. The percentage of impairment allowance allocated to nonaccrual loans at
March 31, 2004 was 35.9%, a decrease of 8.5 percentage points from 44.4% at
March 31, 2003. The percentage of impairment allowance allocated to
restructured loans at March 31, 2004 was 30.2%, an increase of 7.9 percentage
points from 22.3% at March 31, 2003.

Based upon a review of borrowers' financial status, from time to time we grant
various concessions to troubled borrowers at the borrowers' request, including
reductions in the stated interest rates or the principal amount of loans, and
extensions of the maturity date. According to our policies, such modifications
are made to mitigate the near-term burden of the loans provided to the
borrowers and to better match the payment terms with the borrower's expected
future cash flows or, in cooperation with other creditors, to reduce the
overall debt burden of the borrowers so that they may normalize their
operations, in each case to improve the likelihood that the loans will be
repaid in accordance with the revised terms. The nature and amount of the
concessions depend on the particular financial condition of each borrower. In
principle, however, we do not modify the terms of loans to borrowers that are
considered "Likely to Become Bankrupt," "Virtually Bankrupt" or "Bankrupt"
because in these cases there is little likelihood that the modification of loan
terms would enhance recovery of the loans.

Allocated allowance for large groups of smaller-balance homogeneous loans

The allocated allowance for large groups of smaller-balance homogeneous loans
is focused on loss experience for the pool rather than on an analysis of
individual loans. Large groups of smaller-balance homogeneous loans primarily
consist of first mortgage housing loans to individuals. The allowance for
groups of performing loans is based on historical loss experience over a
period. In determining the level of the allowance for delinquent groups of
loans, we classify groups of homogeneous loans based on the risk rating and/or
the number of delinquencies. We determine the credit loss allowance for
delinquent groups of loans based on the probability of insolvency by the number
of actual delinquencies and actual loss experience. The loss experience is
usually determined by reviewing the historical loss rate. The allocated credit
loss allowance for large groups of smaller-balance homogeneous loans was
(Yen)38.8 billion at March 31, 2004, a slight increase from (Yen)37.5 billion
at March 31, 2003.

Allocated allowance for country risk exposure

The allocated credit loss allowance for country risk exposure is based on an
estimate of probable losses relating to the exposure to countries that we
identify as having a high degree of transfer risk. We use a country risk
grading system that assigns risk ratings to individual countries. To determine
the risk rating, we consider the instability of foreign currency and
difficulties regarding debt servicing. The allowance is determined based on the
assessment of individual country risks, taking into consideration various
factors such as the political and macroeconomic situation and debt repayment
capability. It is generally based on a function of default probability and
expected recovery ratios, taking external credit ratings into account. The
allocated allowance for country risk exposure decreased (Yen)6.6 billion from
(Yen)12.5 billion at March 31, 2003 to (Yen)5.9 billion at March 31, 2004. This
decrease resulted from a decrease in credit exposure to the countries,
including Argentina and Indonesia, which were subject to this allowance, and
from worldwide business recovery.

                                      77

<PAGE>

The following is a summary of cross-border outstandings to counterparties* in
major Asian and Latin American countries at March 31, 2003 and 2004:

<TABLE>
<CAPTION>
                                               At March 31,
                                           ---------------------
                                              2003       2004
                                           ---------- ----------
                                               (in billions)
                <S>                        <C>        <C>
                Hong Kong................. (Yen)176.2 (Yen)300.6
                Singapore.................      257.2      211.4
                People's Republic of China      132.1      194.6
                South Korea...............      240.4      191.1
                Thailand..................      146.4      145.6
                Malaysia..................       84.0       84.7
                Philippines...............       46.9       41.2
                Indonesia.................       26.6       22.5
                Brazil....................      119.2       82.0
                Mexico....................       74.3       45.0
                Argentina.................       34.1       18.2
</TABLE>
--------
* We recorded allocated allowance for country risk exposure for specific
  countries, not all of the countries above.

Formula allowance for substandard, special mention and unclassified loans

The formula allowance is calculated by applying estimated loss factors to
outstanding substandard, special mention and unclassified loans. In evaluating
of inherent loss for these loans, we rely on a statistical analysis that
incorporates a percentage of total loans based on historical loss experience.

We have computed the formula allowance based on estimated credit losses using a
methodology defined by the credit rating system. Estimated losses inherent in
the loan portfolio at the balance sheet date are calculated by multiplying the
default ratio by the irrecoverable ratio (determined as a complement of the
recovery ratio). The default ratio is determined by each credit risk rating,
taking into account the historical number of defaults of borrowers within each
credit risk rating divided by the total number of borrowers within that credit
risk rating existing at the beginning of the five-year observation period. The
recovery ratio is determined by the historical experience of collections
against loans in default.

UnionBanCal Corporation, our largest overseas subsidiary, calculates the
formula allowance by applying loss factors to outstanding loans and certain
unused commitments, in each case based on the internal risk grade of such
loans, leases and commitments. Changes in risk grades affect the amount of the
formula allowance. Loss factors are based on historical loss experience and may
be adjusted for significant factors that, in management's judgment, affect the
collectibility of the portfolio as of the evaluation date. Loss factors are
developed in the following ways:

..   pass graded loss factors for commercial, financial and industrial loans, as
    well as all problem graded loan loss factors, are derived from a migration
    model that tracks historical losses over a period, which we believe
    captures the inherent losses in our loan portfolio;

..   pass graded loss factors for commercial real estate loans and construction
    loans are based on the average annual net charge-off rate over a period
    reflective of a full economic cycle; and

..   pooled loan loss factors (not individually graded loans) are based on
    expected net charge-offs for one year. Pooled loans are loans that are
    homogeneous in nature, such as consumer installment, home equity,
    residential mortgage loans and automobile leases.

                                      78

<PAGE>

Though there are a few technical differences in the methodology used for the
allowance for credit losses as mentioned above, we examine overall sufficiency
of the formula allowance periodically by back-test comparison with the actual
results of loss experience subsequent to the balance sheet date.

The formula allowance decreased (Yen)104.3 billion from (Yen)309.5 billion at
March 31, 2003 to (Yen)205.2 billion at March 31, 2004. This decrease was due
to a reduction of some performing loans of which credit risk and percentage of
allowance were comparatively high.

Unallocated allowance

The unallocated allowance contains amounts that are based on management's
evaluation of conditions that are not directly measured in the determination of
the formula and specific allowances. The evaluation of the inherent loss with
respect to these conditions is subject to a higher degree of uncertainty
because they are not identified with specific problem credits or portfolio
segments. The conditions include the following, as our management understood
them to exist at the balance sheet date:

..   general economic and business conditions affecting our key lending areas;

..   credit quality trends, including trends in nonperforming loans expected to
    result from existing conditions;

..   collateral values;

..   loan volumes and concentrations;

..   seasoning of the loan portfolio;

..   specific industry conditions within portfolio segments;

..   recent loss experience in particular segments of the portfolio;

..   duration of the current business cycle;

..   bank regulatory examination results; and

..   findings of our internal credit examiners.

To the extent that any of these conditions is evidenced by a specifically
identifiable problem credit as of the evaluation date, management's estimate of
the effect of the condition may be reflected as a specific allowance,
applicable to the specific credit. Where any of these conditions is not
evidenced by a specifically identifiable problem credit as of the evaluation
date, management's evaluation of the probable loss related to the condition is
first reflected in the formula allowance and then considered in the unallocated
allowance. The allowance for credit losses is based upon estimates of probable
losses inherent in the loan portfolio. Although we use methodologies that are
intended to reduce the differences between estimated and actual losses, the
actual losses can vary from the estimated amounts.

The unallocated allowance decreased (Yen)4.8 billion from (Yen)23.3 billion at
March 31, 2003 to (Yen)18.5 billion at March 31, 2004. This decrease primarily
reflected improving economic factors and identifiable improving conditions in
several specific sectors in the United States.

Allowance for Off-balance-sheet Credit Instruments

In addition to the allowance for credit losses on the loan portfolio, we
maintain an allowance for credit losses on off-balance-sheet credit
instruments, including commitments to extend credit, a variety of guarantees
and standby letters of credit. This allowance is included in other liabilities.
With regard to the specific allocated allowance for specifically identified
credit exposure and the allocated formula allowance, we apply the same
methodology that we use in determining the allowance for loan credit losses.
The allowance for credit losses on off-balance-sheet

                                      79

<PAGE>

credit instruments was (Yen)97.0 billion at March 31, 2004, an increase of
(Yen)28.1 billion, or 40.9%, from (Yen)68.9 billion at March 31, 2003. This
increase is primarily due to the accelerated restructuring and downgrades of
some borrowers to whom we had extended off-balance sheet credit.

Investment Portfolio

Our investment securities are primarily comprised of marketable equity
securities and Japanese government and Japanese government agency bonds, which
are mostly classified as available-for-sale securities. We also hold Japanese
government bonds which are classified as securities being held to maturity.

We hold equity securities of some of our customers for strategic purposes, in
particular to maintain long-term relationships with these customers. However,
our current goal is to reduce our aggregate value of equity securities to
approximately 50% of our Tier I capital by March 31, 2007, because we believe
from a risk management perspective, reducing the price fluctuation risk in our
equity portfolio is imperative. As of March 31, 2004, we already reduced the
aggregate value of marketable equity securities under Japanese GAAP to 74% of
our Tier I capital which satisfies the required level under the legislation
forbidding banks from holding equity securities in excess of their Tier I
capital after September 30, 2006. As part of our efforts to reduce our equity
securities, in addition to sales in the stock market, we will continue to take
into account other options such as sales to the Banks' Shareholdings Purchase
Corporation and transfers to the exchange traded funds. In past years, before
our equity portfolio's value was below our Tier I capital, we sold some of our
equities to the Bank of Japan, which purchases equities only in excess of a
bank's Tier I capital as a method to assist the bank to reduce its equity
portfolio.

Investment securities increased (Yen)4.59 trillion, from (Yen)16.91 trillion at
March 31, 2003 to (Yen)21.50 trillion at March 31, 2004.

Available-for-sale securities increased (Yen)3.49 trillion from (Yen)16.80
trillion at March 31, 2003 to (Yen)20.29 trillion at March 31, 2004. This
increase was due primarily to an increase in amount of Japanese government
bonds and an increase in the value of marketable equity securities. The
increase in Japanese government bonds was partly due to the fact that our
balance of deposits exceeded our loans, and Japanese government bonds were a
viable investment option for us.

Net unrealized gains on available-for-sale securities included in the
investment portfolio at March 31, 2003 and 2004 were (Yen)0.74 trillion and
(Yen)1.40 trillion, respectively. These net unrealized gains related
principally to marketable equity securities and the increase in net unrealized
gains reflected a significant improvement in the Japanese stock market at March
31, 2004, compared to March 31, 2003.

The amortized cost of securities being held to maturity increased (Yen)1.05
trillion from nil at March 31, 2003 to (Yen)1.05 trillion at March 31, 2004.
This increase was due primarily to an increase in investment in Japanese
government bonds.

In April 2003, we reassessed the appropriateness of the classification for the
available-for-sale securities which had been acquired subsequent to September
2000, when we transferred our held-to-maturity securities to available-for-sale
securities, and acquisitions thereafter had been classified as either
available-for-sale or trading. As a result of reassessment, (Yen)50.4 billion
of securities are reclassified as held-to-maturity. For further information
regarding the transfer of held-to-maturity securities to available-for-sale
securities in September 2000, see note 4 to our consolidated financial
statements.

In addition to the reclassification of securities from available-for-sale to
held-to-maturity as set forth above, during the fiscal year ended March 31,
2004, we started to classify a portion of our newly acquired debt securities
into the held-to-maturity category to enable more stable fund management.

                                      80

<PAGE>

Subsequent to March 31, 2004, our bond portfolio value has experienced declines
as long-term interest rates have risen in recent months. However, since stock
and bond prices are inherently volatile, we are not able to estimate the
expected impacts of fluctuations in these market prices on our future financial
condition or results of operations.

We had an investment in shares of common stock issued by Mitsubishi Motors
Corporation of (Yen)8.6 billion at March 31, 2004. These shares were classified
as available-for-sale securities and were measured at fair value based on the
quoted market price of (Yen)263 per share as of March 31, 2004. Subsequent to
March 31, 2004, the per share quoted market price of Mitsubishi Motors
Corporation declined to a level below (Yen)80 per share, after hitting over
(Yen)300 per share in mid-April. Based on a price level of around (Yen)100 per
share in September 2004, a significant part of our investment has been lost
subsequent to March 31, 2004.

Cash and Due from Banks

Cash and due from banks at March 31, 2004 was (Yen)2.76 trillion, a decrease of
(Yen)1.00 trillion from (Yen)3.76 trillion at March 31, 2003. The decrease in
cash and due from banks was primarily attributable to a decrease in deposits
with the Bank of Japan at the end of the fiscal year, due to an increase in
investments in short-term Japanese government bonds at the end of the fiscal
year.

Interest-earning Deposits in Other Banks

Interest-earning deposits in other banks fluctuate significantly from day to
day depending upon financial market conditions. Interest-earning deposits in
other banks at March 31, 2004 were (Yen)3.19 trillion, a decrease of (Yen)0.46
trillion, from (Yen)3.65 trillion at March 31, 2003. This decrease primarily
reflected a decrease in foreign currency deposits.

Deferred Tax Assets

Deferred tax assets decreased (Yen)0.56 trillion, or 43.0%, from (Yen)1.31
trillion at March 31, 2003 to (Yen)0.75 trillion at March 31, 2004. This
decrease was due primarily to a decrease in existing deductible temporary
differences. The decrease in existing deductible temporary differences
reflected a decrease in allowance for credit losses and an increase in
unrealized gains on investment securities available for sale. A decrease in net
operating loss carryforwards, which is attributable to the existence of taxable
income for the fiscal year ended March 31, 2004, also contributed to the
decrease in deferred tax assets.

Total Liabilities

At March 31, 2004, total liabilities were (Yen)82.29 trillion, an increase of
(Yen)6.55 trillion, from (Yen)75.74 trillion at March 31, 2003. This increase
primarily reflected increases of (Yen)3.27 trillion in total deposits and
(Yen)2.84 trillion in other short-term borrowings. This increase was partially
offset by a decrease of (Yen)0.93 trillion in trading account liabilities, and
a decrease in the yen values for liabilities denominated in the US dollar
resulting from the appreciation of the yen as mentioned below.

The appreciation of the yen against the US dollar and other foreign currencies
during the fiscal year ended March 31, 2004 decreased the yen values for
liabilities denominated in foreign currencies by approximately (Yen)1.87
trillion.

Deposits

Deposits are our primary source of funds. Total average deposits increased
(Yen)3.84 trillion from (Yen)52.95 trillion for the fiscal year ended March 31,
2003 to (Yen)56.79 trillion for the fiscal year ended March 31, 2004. This
increase

                                      81

<PAGE>

reflected a (Yen)2.28 trillion increase in average domestic interest-bearing
deposits and a (Yen)1.13 trillion increase in average domestic
non-interest-bearing deposits.

Domestic deposits increased (Yen)1.55 trillion from (Yen)45.18 trillion at
March 31, 2003 to (Yen)46.73 trillion at March 31, 2004, while foreign deposits
increased (Yen)1.72 trillion from (Yen)10.09 trillion at March 31, 2003 to
(Yen)11.81 trillion at March 31, 2004.

Although the Deposit Insurance Corporation guarantees in full all current
deposits, ordinary deposits and other specified deposits until March 31, 2005,
under the Deposit Insurance Law amended in December 2002, the movements toward
the reduction of blanket deposit insurance to a (Yen)10 million maximum, have
led some depositors to transfer their deposits to more financially stable
banks. The increase in our average domestic deposits for the fiscal year ended
March 31, 2004 partly reflected such movements.

Short-term Borrowings

We use short-term borrowings as a funding source and in our management of
interest rate risk. For management of interest rate risk, short-term borrowings
are used in asset liability management operations to match interest rate risk
exposure resulting from loans and other interest-earning assets and for
managing funding costs of various financial instruments at an appropriate level
as a whole, based on our forecast of future interest rate levels. Short-term
borrowings include call money and funds purchased, payables under repurchase
agreements, payables under lending transactions and other short-term borrowings.

The total average balance of short-term borrowings increased (Yen)2.43 trillion
from (Yen)7.87 trillion for the fiscal year ended March 31, 2003 to (Yen)10.30
trillion for the fiscal year ended March 31, 2004.

Short-term borrowings increased (Yen)2.75 billion from (Yen)8.44 trillion at
March 31, 2003 to (Yen)11.19 trillion at March 31, 2004. This increase was
primarily attributable to an increase of 2.84 trillion in other short-term
borrowings primarily due to an increase of funding from The Bank of Japan in
connection with its daily money market operations.

Severance Indemnities and Pension Liabilities

We have defined benefit pension plans in Japan and overseas, which cover
substantially all of our employees. In Japan, we have Employees' Pension Fund
plans, which are defined benefit plans established under the Japanese Welfare
Pension Insurance Law. These plans are composed of (a) a substitutional portion
based on the pay-related part of the old-age pension benefits prescribed by the
Japanese Welfare Pension Insurance Law (similar to social security benefits in
the U.S.) and (b) a corporate portion based on a contributory defined benefit
pension arrangement established at the discretion of each employer. An employer
with an Employees' Pension Fund plan and its employees are exempt from
contributions to Japanese Pension Insurance that would otherwise be required if
they had not elected to fund the substitutional portion of the benefit through
an Employees' Pension Fund plan arrangement. The Employee's Pension Fund plan,
in turn, pays both the corporate and substitutional pension benefits to retired
beneficiaries out of its plan assets. Benefits of the substitutional portion
are based on a standard remuneration scheduled as determined by the Japanese
Welfare Pension Insurance Law, but the benefits of the corporate portion are
based on a formula determined by each employer's Employees' Pension Fund plan.
In June 2001, the Japanese Welfare Insurance Law was amended to permit each
employer's Employees' Pension Fund plan to separate the substitutional portion
from its Employees' Pension Fund plan and transfer the obligation and related
assets to the government. The separation process occurs in several phases.

As mentioned in "Item 5.A. Operating Results--Recent Developments--Planned
Transfer to the Japanese Government of the Substitutional Portion of Employee
Pension Fund Liabilities," in August 2003, the government approved our
application to transfer the obligation to pay benefits for future employee
service related to the substitutional portion. Upon that approval, we began
making pension insurance payments to the

                                      82

<PAGE>

government and the government assumed the benefit obligations arising from
future employee services. To complete the entire separation process, in August
2004, we made another application for transfer to the government of the
remaining substitutional portion related to the benefit obligation for past
services, but the timing of the approval is not known yet. Upon completion of
the separation, the remaining substitutional obligation and related pension
plan assets, determined pursuant to a government formula, will be transferred
to a government agency, and we will be released from paying the remaining
substitutional portion of the benefits to our employees. After the separation,
both we and our employees will be required to make periodic contributions to
the Japanese Pension Insurance, and the Japanese government will be responsible
for all benefit payments earned under the Japanese Welfare Pension Insurance
Law.

The impact on our financial statements of the transfer, which will be accounted
for in accordance with EITF 03-2, discussed in "Item 5.A. Operating
Results--Recently Issued Accounting Pronouncements," is not known and cannot be
reasonably estimated until the completion of the transfer.

Sources of Funding and Liquidity

Our primary source of liquidity is from a large balance of deposits, mainly
ordinary deposits, certificates of deposit and time deposits. Time deposits
have shown a historically high rollover rate among our corporate customers and
individual depositors. Due to the economic and financial environment in Japan,
as well as to our relatively high financial standing in Japan, our deposits
have steadily increased during recent years, from (Yen)51.83 trillion at March
31, 2002 to (Yen)58.54 trillion at March 31, 2004. As of March 31, 2004, our
deposits of (Yen)58.54 trillion exceeded our loans, net of allowance for credit
losses of (Yen)39.28 billion, by (Yen)19.26 billion. These deposits provide us
with a sizable source of stable and low-cost funds. While approximately 59% of
certificates of deposit and time deposits mature within three months, we
continuously monitor relevant interest rate characteristics of these funds and
utilize asset and liability management techniques to manage the possible impact
of the rollovers on our net interest margin and liquidity. Our average
deposits, combined with average shareholder's equity, funded 70.9% of our
average total assets of (Yen)83.47 trillion during the fiscal year ended March
31, 2004.

Most of the remaining funding was provided by short-term borrowings and
long-term senior and subordinated debt. Short-term borrowings consist of call
money and funds purchased, payables under repurchase agreements, payables under
securities lending transactions and other short-term borrowings. From time to
time, we have issued long-term instruments such as straight bonds with mainly
three to five years' maturity. Liquidity may also be provided by the sale of
financial assets, including securities available for sale, trading account
securities and loans. Additional liquidity may be provided by the maturity of
loans.

Shareholder's Equity

The following table presents a summary of our shareholder's equity at March 31,
2003 and 2004:

<TABLE>
<CAPTION>
                                                                 At March 31,
                                                          --------------------------
                                                              2003          2004
                                                          ------------  ------------
                                                             (in billions, except
                                                                 percentages)
<S>                                                       <C>           <C>
Preferred stock.......................................... (Yen)  122.1  (Yen)  122.1
Common stock.............................................        749.9         749.9
Capital surplus..........................................        815.2         814.5
Retained earnings........................................        434.2         887.0
Accumulated other changes in equity from nonowner sources       (183.9)        199.3
Less parent company's stock, at cost.....................         (1.8)         (0.7)
                                                          ------------  ------------
   Total shareholder's equity............................ (Yen)1,935.7  (Yen)2,772.1
                                                          ============  ============
Ratio of total shareholder's equity to total assets......         2.49%         3.26%
</TABLE>

                                      83

<PAGE>

Total shareholder's equity increased (Yen)836.4 billion, or 43.2%, from
(Yen)1,935.7 billion at March 31, 2003 to (Yen)2,772.1 billion at March 31,
2004, and the ratio of total shareholder's equity to total assets also showed
an increase of 0.77 percentage points from 2.49% at March 31, 2003 to 3.26% at
March 31, 2004. The increase in total shareholder's equity for the fiscal year
ended March 31, 2004, and the resulting increase in the ratio to total assets,
were principally attributable to an increase of (Yen)452.8 billion in retained
earnings, resulting from net income for the fiscal year ended March 31, 2004
and an increase of (Yen)361.0 billion in net unrealized gains on investment
securities available for sale, net of taxes, recorded as part of accumulated
other changes in equity from nonowner sources.

Due to our holdings of a large amount of marketable Japanese equity securities
and the volatility of the equity markets in Japan, changes in the fair value of
marketable equity securities have significantly affected our shareholder's
equity. The following table presents information relating to the accumulated
net unrealized gains before tax effect in respect of marketable equity
securities at March 31, 2003 and 2004:

<TABLE>
<CAPTION>
                                                          At March 31,
                                                    ------------------------
                                                       2003         2004
                                                    ----------  ------------
                                                      (in billions, except
                                                          percentages)
   <S>                                              <C>         <C>
   Accumulated net unrealized gains................ (Yen)608.7  (Yen)1,321.5
   Accumulated net unrealized gains to total assets       0.78%         1.55%
</TABLE>

The increase in accumulated net unrealized gains on marketable equity
securities at March 31, 2004 was mainly due to the improvement in the Japanese
stock market compared to the previous fiscal year.

Capital Adequacy

We are subject to various regulatory capital requirements promulgated by the
regulatory authorities of the countries in which we operate. Failure to meet
minimum capital requirements can initiate mandatory actions by regulators that,
if undertaken, could have a direct material effect on our consolidated
financial statements.

We continually monitor our risk-adjusted capital ratio closely and manage our
operations in consideration of the capital ratio requirements. These ratios are
affected not only by fluctuations in the value of our assets, including our
marketable securities and deferred tax assets, but also by fluctuations in the
value of the yen against the US dollar and other foreign currencies and by
general price levels of Japanese equity securities.

Capital Requirements for Banking Institutions in Japan

A Japanese banking institution is subject to the minimum capital adequacy
requirements both on a consolidated basis and a stand-alone basis, and is
required to maintain the minimum capital irrespective of whether it operates
independently or as a subsidiary under the control of another company. Under
the Financial Services Agency's guidelines, capital is classified into three
tiers, referred to as Tier I, Tier II and Tier III. Our Tier I capital
generally consists of shareholder's equity items, including common stock,
non-cumulative preferred stocks, capital surplus, minority interests and
retained earnings (which includes deferred tax assets), but recorded goodwill
and other items, such as treasury stock, are deducted from Tier I capital. Our
Tier II generally consists of general reserves for credit losses up to 1.25% of
risk-weighted assets, 45% of the unrealized gains on investment securities
available for sale, 45% of the land revaluation excess, the balance of
perpetual subordinated debt and the balance of subordinated term debt with an
original maturity of over five years subject to certain limitations, up to 50%
of Tier I capital. Our Tier III capital consists of short-term subordinated
debt with an original maturity of at least two years, subject to certain
limitations. At least 50% of the minimum capital requirements must be
maintained in the form of Tier I capital.

Under the Japanese regulatory capital requirements, our consolidated capital
components, including Tier I, Tier II and Tier III and risk-weighted assets are
calculated from our consolidated financial statements prepared under

                                      84

<PAGE>

Japanese GAAP. Also, each of the consolidated and stand-alone capital
components in Japan is calculated from consolidated and non-consolidated
financial statements prepared under Japanese GAAP, respectively.

For a detailed discussion of the capital adequacy guidelines adopted by the
Financial Service Agency and proposed amendments, see "Item 4.B. Information on
the Company--Business Overview--Supervision and Regulation--Japan--Capital
Adequacy."

Capital Requirements for Banking Institutions in the United States of America

In the United States, UnionBanCal Corporation and its banking subsidiary, Union
Bank of California, N.A., our largest subsidiaries operating outside Japan, are
subject to various regulatory capital requirements administered by U.S. Federal
banking agencies, including minimum capital requirements. Under capital
adequacy guidelines and the regulatory framework for prompt corrective action,
they must meet specific capital guidelines that involve quantitative measures
of their assets, liabilities and certain off-balance-sheet items as calculated
under U.S. regulatory accounting practices. Their capital amounts and prompt
corrective action classification are also subject to qualitative judgments by
the regulators about components, risk weightings and other factors.

For a detailed discussion of the capital adequacy guidelines applicable to our
U.S. bank subsidiaries, see "Item 4.B. Information on the Company--Business
Overview--Supervision and Regulation--United States--Bank Capital Requirements
and Capital Distributions."

Capital Requirements for Securities Firms in Japan and Overseas

We have securities subsidiaries in Japan and overseas, which are also subject
to regulatory capital requirements. In Japan, the Securities and Exchange Law
of Japan and related ordinance require securities firms to maintain a minimum
capital ratio of 120% calculated by as a percentage of capital accounts less
certain illiquid assets, as determined in accordance with Japanese GAAP,
against amounts equivalent to market, counterparty credit and operations risks.
Specific guidelines are issued as a ministerial ordinance which detail the
definition of essential components of the capital ratios, including capital,
illiquid assets deductions, risks and related measures. Failure to maintain a
minimum capital ratio will trigger mandatory regulatory actions. A capital
ratio of less than 140% will call for regulatory reporting and a capital ratio
of 100% or less may lead to a suspension of all or part of the business for a
period of time and cancellation of a license. Overseas securities subsidiaries
are subject to the relevant regulatory capital requirements of the countries or
jurisdictions in which they operate. At March 31, 2004, Mitsubishi Securities's
capital accounts, less certain illiquid assets of (Yen)397.8 billion, were
403.2% of total amounts equivalent to market, counterparty credit and
operations risks.

                                      85

<PAGE>

Our Capital Ratios

The table below presents our consolidated risk-based capital, risk-adjusted
assets and risk-based capital ratios at March 31, 2003 and 2004 (underlying
figures are calculated in accordance with Japanese banking regulations based on
information derived from our consolidated financial statements prepared in
accordance with Japanese GAAP, as required by the Financial Services Agency):

<TABLE>
<CAPTION>
                                                              At March 31,
                                                      --------------------------------  Minimum capital
                                                           2003             2004        ratios required
                                                       -------------    -------------   ---------------
                                                      (in billions, except percentages)
<S>                                                   <C>              <C>              <C>
Capital components:
   Tier I capital.................................... (Yen) 2,400.2    (Yen) 2,876.0
   Tier II capital includable as qualifying capital..       2,291.3          2,415.3
   Tier III capital includable as qualifying capital.          30.0             30.0
   Deductions from total qualifying capital..........          33.8             41.7
   Total risk-based capital..........................       4,687.7          5,279.6
Risk-weighted assets.................................      44,903.0         44,093.8
Capital ratios:
   Tier I capital....................................          5.34%            6.52%        4.00%
   Total risk-based capital..........................         10.43            11.97         8.00
</TABLE>

Our total risk-based capital ratio increased 1.54 percentage points from 10.43%
at March 31, 2003 to 11.97% at March 31, 2004. This increase was due primarily
to an increase in Tier I capital, which primarily resulted from an increase in
retained earnings.

Capital Ratios of Subsidiary Banks in the United States

The table below presents the risk-based capital ratios of UnionBanCal
Corporation and Union Bank of California at December 31, 2002 and 2003:

<TABLE>
<CAPTION>
                                                  At December 31,                     Ratios OCC
                                                  --------------  Minimum capital   requires to be
                                                   2002    2003   ratios required "well-capitalized"
                                                  -----   -----   --------------- ------------------
<S>                                               <C>     <C>     <C>             <C>
UnionBanCal Corporation:
   Tier I capital (to risk-weighted assets)...... 11.18%  11.31%       4.00%               --
   Tier I capital (to quarterly average assets)*.  9.75    9.03        4.00                --
   Total capital (to risk-weighted assets)....... 12.93   14.14        8.00                --
Union Bank of California:
   Tier I capital (to risk-weighted assets)...... 10.37%  10.44%       4.00%             6.00%
   Tier I capital (to quarterly average assets)*.  9.01    8.30        4.00              5.00
   Total capital (to risk-weighted assets)....... 11.87   11.88        8.00             10.00
</TABLE>
--------
* Excludes certain intangible assets.

Management believes that, as of December 31, 2003, UnionBanCal Corporation and
Union Bank of California met all capital adequacy requirements to which they
are subject.

As of December 31, 2003, Union Bank of California was categorized as
"well-capitalized" under the regulatory framework for prompt corrective action
in accordance with the notification from the OCC. To be categorized as "well
capitalized," Union Bank of California must maintain minimum total risk-based,
Tier I risk-based and Tier I leverage ratios as set forth in the table. There
are no conditions or events since that notification that management believes
have changed Union Bank of California's category.

                                      86

<PAGE>

Off-balance-sheet Arrangements

In the normal course of our business, we engage in several types of
off-balance-sheet arrangements to meet the financing needs of our customers,
including various types of guarantees, commitments to extend credit and
commercial letters of credit. The following table summarizes these commitments
at March 31, 2004:

<TABLE>
<CAPTION>
                                                              Amount of commitment expiration by period
                                                       --------------------------------------------------------
                                                        Less than     1-3        4-5       Over 5
                                                         1 year      years      years      years       Total
                                                       ----------- ---------- ---------- ---------- -----------
                                                                            (in billions)
<S>                                                    <C>         <C>        <C>        <C>        <C>
Guarantees:
   Standby letters of credit and financial guarantees. (Yen) 1,043 (Yen)  357 (Yen)  252 (Yen)  909 (Yen) 2,561
   Performance guarantees.............................         654        327        126         85       1,192
   Liquidity facilities...............................         555         --         --         --         555
   Derivative instruments.............................      16,135      2,460      1,557        579      20,731
   Others.............................................         309         --         --         --         309
                                                       ----------- ---------- ---------- ---------- -----------
       Total guarantees...............................      18,696      3,144      1,935      1,573      25,348
Other off-balance-sheet instruments:
   Commitments to extend credit.......................      16,827      3,500      2,009        521      22,857
   Commercial letters of credit.......................         376          1          0          0         377
   Others.............................................         207          0          2         36         245
                                                       ----------- ---------- ---------- ---------- -----------
       Total other off-balance-sheet instruments......      17,410      3,501      2,011        557      23,479
                                                       ----------- ---------- ---------- ---------- -----------
       Total.......................................... (Yen)36,106 (Yen)6,645 (Yen)3,946 (Yen)2,130 (Yen)48,827
                                                       =========== ========== ========== ========== ===========
</TABLE>

See note 23 to our consolidated financial statements for a description of the
nature of our guarantees and other off-balance-sheet instruments.

The contractual amounts of these guarantees and other off-balance-sheet
instruments represent the amounts at risk should the contracts be fully drawn
upon with a subsequent default by our customer and a decline in the value of
the underlying collateral. Because many of these commitments expire without
being drawn upon, the total contractual or notional amounts of these
commitments do not necessarily represent our future cash requirements. At March
31, 2004, approximately 74% of these commitments will expire within one year,
22% from one year to five years and 4% after five years. Such risks are
monitored and managed as a part of our risk management system as set forth in
"Item 11. Quantitative and Qualitative Disclosures about Credit, Market and
Other Risk." In addition, in accordance with SFAS No. 5, "Accounting for
Contingencies," we evaluate off-balance-sheet arrangement in the manner
described in note 1 to our consolidated financial statements.

In the aggregate, the income generated from fees and commissions is one of our
most important sources of revenue. Such income amounted to (Yen)440.9 billion
during the fiscal year ended March 31, 2004, accounting for approximately 45%
of our non-interest income for the fiscal year. However, the fees generated
specifically from off-balance-sheet arrangements are not a dominant source of
our fees and commissions.

Some of our off-balance-sheet arrangements are related to activities of special
purpose entities, most of which are VIEs. As set out in "Item 5.A. Operating
Results--Accounting Changes--Variable Interest Entities," we have not applied
FIN No. 46 and/or FIN No. 46R to entities created before February 1, 2003.
Accordingly, such entities were not consolidated as of March 31, 2004.
Off-balance-sheet arrangements include the following types of special purpose
entities.

Asset-backed Commercial Paper Conduits

We administer several third-party owned, multi-seller finance companies
(primarily asset-backed commercial paper conduits) that purchase financial
assets, primarily pools of receivables, from third-party customers. Assets

                                      87

<PAGE>

purchased by these conduits are generally funded by issuing commercial paper,
or partly by borrowings from us or third parties. While customers basically
continue to service the transferred trade receivables, we underwrite,
distribute, make a market in commercial paper issued by the conduits, provide
liquidity and credit support facilities to the entities. These conduits earn
profits from the interest rate spread between receivables purchased and
commercial paper issued. These earnings are used to cover credit losses, taxes,
professional fees and other administrative expenses. The residual interest, if
any, is distributed to us annually in the form of back-end fees.

We provide liquidity facilities that are to be used in the event of any
disruption in the commercial paper market and/or to manage mismatches in cash
flows between the redemption of the commercial paper and the collection of the
trade receivables. In addition, we provide credit support facilities for the
full and timely payment of maturing commercial paper. We also act as a dealer
for the commercial paper program and distribute it primarily to institutional
investors. We occasionally hold the commercial paper in our trading account
portfolio before marketing them to third party investors. The average holding
period of the commercial paper before distribution to third party investors is
approximately 9 days.

The total assets of the special purpose entities to which we provide liquidity
facilities were (Yen)3,116.3 billion at March 31, 2003 and (Yen)2,974.9 billion
at March 31, 2004. We provided liquidity and credit enhancements that were
available for the redemption of outstanding commercial paper in the amounts of
(Yen)2,352.8 billion at March 31, 2003 and (Yen)2,253.7 billion at March 31,
2004. We also held in our portfolio of trading securities commercial paper
issued by these entities in the amounts of (Yen)1,004.9 billion at March 31,
2003 and (Yen)1,423.6 at March 31, 2004. Moreover, we provided liquidity
advance fund in the amount of (Yen)113.8 billion at March 31, 2004.

Securitization of Client Properties

We administer several third-party owned conduits that purchase clients assets,
primarily buildings and lands, from third-party customers. Assets purchased by
these conduits are generally funded by investments under partnership agreements
from customers or by borrowings from us or third-parties. While the customers
basically continue to use the transferred real estate by lease-back agreements,
the customers that invest in conduits absorb the expected losses of the
conduits. With regard to transactions with these entities, we earn fee in
return for administration and interest on loan to the entities.

We, as a non-primary beneficiary, had variable interests in this type of
entities, with total assets of (Yen)689.6 billion as of March 31, 2004, and are
exposed to maximum loss of (Yen)174.8 billion, which will realize in case our
loan to entities are not collected unexpectedly.

Investment Funds

We hold equity or other forms of interest in various investment funds that
invest in equity and debt securities, including listed Japanese securities and
investment grade bonds and, to a limited extent, other types of assets. In
addition to such interests, we have commitments to provide additional
investments to these funds as stipulated in the applicable investment
agreements. We intend to seek gain on our investment into such funds, while we
are exposed to the risk of losing the value of our investment.

We occasionally sell assets such as nonperforming loans to these funds, in
particular the Corporate Recovery Fund, when we believe that such sale may
improve our asset quality.

Corporate Recovery Fund. We have non-controlling equity interests in corporate
recovery funds whose principal business purpose is to generate profits by
investing in companies in the process of restructuring and then, typically,
selling these investments after the companies complete their restructurings.
Such funds purchase nonperforming loans from us or others and in some cases
acquire majority ownership in the borrower companies by means of a
debt-for-equity swap. Our non-voting interests in these funds amounted to
(Yen)6.6 billion at

                                      88

<PAGE>

March 31, 2003 and (Yen)32.7 billion at March 31, 2004, respectively. In
addition, at March 31, 2004, we had commitments to make additional
contributions of up to (Yen)17.0 billion to these funds.

The total assets of the corporate recovery funds in which we have interests
were approximately (Yen)21.1 billion at March 31, 2003 and (Yen)123.5 billion
at March 31, 2004. We sold to corporate recovery funds nonperforming loans with
an aggregate net book value of (Yen)7.0 billion for (Yen)4.1 billion during the
fiscal year ended March 31, 2003 and an aggregate net book value of (Yen)2.2
billion for (Yen)1.6 billion during the fiscal year ended March 31, 2004. For a
detailed discussion on additional provisions for credit losses associated with
the sale of such loans, see "--Financial Condition--Allowance for Credit
Losses, Nonperforming and Past Due Loans."

Venture Capital Fund. We own non-controlling equity interests in investment
funds managed by fund management companies who have discretionary investment
powers. These funds seek to invest in start-up companies or companies that are
rapidly developing. The aggregate assets of these funds were approximately
(Yen)1,291.9 billion at March 31, 2004. We made contributions to these funds
amounting to (Yen)70.5 billion at March 31, 2004. At March 31, 2004, in
accordance with the applicable limited partnership agreements, we had
commitments to make additional contributions of up to (Yen)12.4 billion when
required by the fund management companies.

Investment Trust. We purchase the share units of investment trusts as mid- to
long-term investments. These investment trusts are managed by investment
advisory companies with the objective of investing in a diversified portfolio
consisting of equity and debt securities, primarily shares of Japanese public
companies. At March 31, 2004, our share units in investment trusts amounted to
approximately (Yen)464.4 billion, which is equal to our maximum loss exposure.
Generally, we are not obligated to invest in or extend funds by purchasing
additional share units and our off-balance-sheet exposures or commitments
relating to this type of special purpose entity were not material.

Special Purpose Entities Created for Structured Financing

We extend non-recourse asset-backed loans to special purpose entities, which
hold beneficial interests in real properties, to provide financing for special
purpose projects including real estate development and natural resource
development managed by third parties. We generally act as a member of a lending
group and do not have any equity investment in the entities, which is typically
provided by project owners. We earn profit by arrangement fee and interest on
non-recourse asset-backed loans to these entities.

We, as a non-primary beneficiary, had variable interests in this type of
entities, with total assets of (Yen)10,131.5 billion, as of March 31, 2004, and
are exposed to maximum loss of (Yen)547.4 billion, which will possibly realize
if our loans to entities are not collected in accordance with the contractual
terms.

Repackaged Instruments

We repackage financial instruments to create new financial instruments with
features that match our customers' needs and preferences. We purchase financial
instruments such as bonds and transfer them to special purpose entities which
then issue new instruments. The special purpose entities may enter into
derivative transactions including interest rate and currency swaps with us or
other financial institutions to modify the cash flows of the underlying
financial instruments. We underwrite and market to our customers the new
instruments issued by the special purpose entities. With regard to transactions
with these entities, we earn revenues by sales of securities, derivative
transactions or arrangement fee. In addition, we may purchase asset-backed
securities and credit linked notes issued by entities managed by third parties.
At March 31, 2004, the total assets of these entities were estimated as
(Yen)1,517.4 billion and our maximum exposure to loss as a result of its
involvement with such entities were estimated as (Yen)384.8 billion.

                                      89

<PAGE>

Contractual Cash Obligations

In the normal course of our business, we enter into contractual agreements
whereby we commit to future purchases of products or services from unaffiliated
parties. The following table shows a summary of our contractual cash
obligations at March 31, 2004:

<TABLE>
<CAPTION>
                                               Payments due by period
                              --------------------------------------------------------
                               Less than     1-3                  Over 5
                                1 year      years     4-5years    years       Total
                              ----------- ---------- ---------- ---------- -----------
                                                   (in billions)
<S>                           <C>         <C>        <C>        <C>        <C>
Contractual cash obligations:
   Time deposits............. (Yen)21,704 (Yen)3,174 (Yen)  575 (Yen)   44 (Yen)25,497
   Debentures................         266         --         --         --         266
   Long-term debt............         595      1,309        820      2,313       5,037
   Capital lease obligations.          18         24          6          3          51
   Operating leases..........          13         23         16         25          77
   Purchase obligations......           1          1          1         33          36
                              ----------- ---------- ---------- ---------- -----------
       Total................. (Yen)22,597 (Yen)4,531 (Yen)1,418 (Yen)2,418 (Yen)30,964
                              =========== ========== ========== ========== ===========
</TABLE>

Purchase obligations include any legally binding contractual obligations that
require us to spend more than (Yen)100 million annually under the contract.
Purchase obligations in the table primarily include commitments to make
investments into corporate recovery or private equity investment funds.

Non-exchange Traded Contracts Accounted for at Fair Value

The use of non-exchange traded or over-the-counter contracts provides us with
the ability to adapt to the varied requirements of a wide customer base while
mitigating market risks. Non-exchange traded contracts are accounted for at
fair value, which is generally based on pricing models or quoted market prices
for instruments with similar characteristics. Gains or losses on non-exchange
traded contracts are included in "Trading account profits--net" in our
consolidated statements of operations. These contracts consist primarily of
crude oil commodity contracts. The following table summarizes the changes in
fair value of non-exchange traded contracts for the fiscal years ended March
31, 2003 and 2004:

<TABLE>
<CAPTION>
                                                                                          Fiscal years ended
                                                                                               March 31,
                                                                                       ------------------------
                                                                                           2003         2004
                                                                                       -----------  -----------
                                                                                             (in millions)
<S>                                                                                    <C>          <C>
Net fair value of contracts outstandings at beginning of fiscal year.................. (Yen)  (568) (Yen)10,275
Changes attributable to contracts realized or otherwise settled during the fiscal year      (3,599)      (8,467)
Fair value of new contracts when entered into during the fiscal year..................          (8)         (23)
Other changes in fair value, principally revaluation at end of fiscal year............      14,450       10,269
                                                                                       -----------  -----------
Net fair value of contracts outstandings at end of fiscal year........................ (Yen)10,275  (Yen)12,054
                                                                                       ===========  ===========
</TABLE>

During the fiscal years ended March 31, 2003 and 2004, the fair value of
non-exchange traded contracts increased primarily due to an increase in the
fair value of oil commodity contracts indexed to the Brent crude oil and WTI
crude oil prices, reflecting political factors in the Middle East and other
factors.

                                      90

<PAGE>

The following table summarizes the maturities of non-exchange traded contracts
at March 31, 2004:

<TABLE>
<CAPTION>
                                       Net fair value of contracts--
                                             unrealized gains
                                     ---------------------------------
                                                      Prices based on
                                     Prices actively models and other
                                         quoted      valuation methods
                                     --------------- -----------------
                                               (in millions)
          <S>                        <C>             <C>
          Maturity less than 1 year.   (Yen) 5,415       (Yen)167
          Maturity less than 3 years         2,284            238
          Maturity less than 5 years         1,321            189
          Maturity 5 years or more..         2,440              0
                                       -----------       --------
             Total fair values......   (Yen)11,460       (Yen)594
                                       ===========       ========
</TABLE>

C. Research and Development, Patents and Licenses, etc.

Not applicable.

D. Trend Information

See the discussions under Items 5.A. and 5.B. of this Annual Report.

E. Off-balance-sheet Arrangements

See the discussion under "Item 5.B. Operating and Financial Review and
Prospects--Liquidity and Capital Resources."

F. Tabular Disclosure of Contractual Obligations

See the discussion under "Item 5.B. Operating and Financial Review and
Prospects--Liquidity and Capital Resources."

G. Safe Harbor

See the discussion under "Forward-Looking Statements."

                                      91

<PAGE>

Item 6. Directors, Senior Management and Employees.

A. Directors and Senior Management

The following table sets forth the members of our board of directors as of July
31, 2004, together with their respective dates of birth and positions.

<TABLE>
<CAPTION>
Name                  Date of Birth   Business activities performed inside and outside Bank of Tokyo-Mitsubishi
----                  -------------   -------------------------------------------------------------------------
<C>                 <C>               <S>
+Shigemitsu Miki    April 4, 1935          Mr. Miki has served as Chairman of Bank of Tokyo-Mitsubishi
                                           since June 2004 and as a board member of Bank of Tokyo-
                                           Mitsubishi since April 1996. He served as President of Bank of
                                           Tokyo-Mitsubishi from June 2000 to June 2004 and as a
                                           Deputy President from May 1997 to June 2000. Mr. Miki has
                                           served as a director of Mitsubishi Tokyo Financial Group, Inc.
                                           since April 2001 and served as President of Mitsubishi Tokyo
                                           Financial Group, Inc. from April 2001 to June 2004. He has
                                           also served as a Corporate Auditor of Millea Holdings, Inc.
                                           since April 2002 and as a Corporate Auditor of Mitsubishi
                                           Motors Corporation and Mitsubishi Corporation since June
                                           2004.

+Nobuo Kuroyanagi   December 18, 1941      Mr. Kuroyanagi has served as President of Bank of Tokyo-
                                           Mitsubishi since June 2004. He served as a Deputy President of
                                           Bank of Tokyo-Mitsubishi from June 2002 to June 2004, as a
                                           non-board member Managing Director of Bank of Tokyo-
                                           Mitsubishi from June 2001 to June 2002 and as a Managing
                                           Director of Bank of Tokyo-Mitsubishi from June 1996 to May
                                           2001. Mr. Kuroyanagi served as a board member of Bank of
                                           Tokyo-Mitsubishi from April 1996 to June 2001 and has served
                                           as a board member since June 2002. He has served as a
                                           Director of Mitsubishi Tokyo Financial Group, Inc. since June
                                           2003 and as President and Chief Executive Officer of
                                           Mitsubishi Tokyo Financial Group, Inc. since June 2004.

+Takahiro Moriguchi May 22, 1944           Mr. Moriguchi has served as a Deputy President of Bank of
                                           Tokyo-Mitsubishi since May 2003. He has served as a board
                                           member of Bank of Tokyo-Mitsubishi since April 1996, served
                                           as a Managing Director of Bank of Tokyo-Mitsubishi from
                                           June 2000 to May 2003 and as President and Chief Executive
                                           Officer of UnionBanCal Corporation from May 1997 to June
                                           2001.

+Naotaka Obata      October 15,1944        Mr. Obata has served as a Deputy President of Bank of Tokyo-
                                           Mitsubishi since June 2004. He served as a non-board member
                                           Senior Managing Director of Bank of Tokyo-Mitsubishi from
                                           January 2004 to June 2004, as a non-board member Managing
                                           Director of Bank of Tokyo-Mitsubishi from June 2001 to
                                           December 2003 and as a Managing Director of Bank of Tokyo-
                                           Mitsubishi from May 1999 to June 2001. Mr. Obata served as a
                                           board member of Bank of Tokyo-Mitsubishi from April 1996
                                           to June 2001 and has served as a board member since June
                                           2004.
</TABLE>

                                      92

<PAGE>

<TABLE>
<CAPTION>
Name                 Date of Birth   Business activities performed inside and outside Bank of Tokyo-Mitsubishi
----                 -------------   -------------------------------------------------------------------------
<C>                 <C>              <S>

++Masayuki Tanaka   April 5, 1944          Mr. Tanaka has served as a Deputy President of Bank of
                                           Tokyo-Mitsubishi since June 2004 and as Chief Executive of
                                           the Operation Service Business Unit and System Services
                                           Business Unit of Bank of Tokyo-Mitsubishi since May 2002
                                           and as Chief Executive of the eBusiness & IT Initiatives Unit
                                           of Bank of Tokyo-Mitsubishi since May 2003. Mr. Tanaka has
                                           served as a board member of Bank of Tokyo-Mitsubishi since
                                           April 1996, served as a Senior Managing Director of Bank of
                                           Tokyo-Mitsubishi from January 2004 to June 2004 and served
                                           as a Managing Director of Bank of Tokyo-Mitsubishi from
                                           May 1999 to December 2003.

++Norimichi Kanari  December 4, 1946       Mr. Kanari has served as a Managing Director of Bank of
                                           Tokyo-Mitsubishi since June 2001 and as President and Chief
                                           Executive Officer of UnionBanCal Corporation and Union
                                           Bank of California, N.A. since July 2001. Mr. Kanari has
                                           served as a board member of Bank of Tokyo-Mitsubishi since
                                           June 1997.

+Yoshihiro Watanabe July 26,1947           Mr. Watanabe has served as a Managing Director of Bank of
                                           Tokyo-Mitsubishi since June 2004 and as Chief Executive of
                                           the Global Corporate Banking Business Unit since May 2004.
                                           He served as a non-board member Managing Director of Bank
                                           of Tokyo-Mitsubishi from June 2001 to June 2004 and served
                                           as a Managing Director of Bank of Tokyo-Mitsubishi from
                                           May 2001 to June 2001. Mr. Watanabe served as a board
                                           member of Bank of Tokyo-Mitsubishi from June 1997 to June
                                           2001 and has served as a board member since June 2004.

+Katsunori Nagayasu April 6, 1947          Mr. Nagayasu has served as a Managing Director of Bank of
                                           Tokyo-Mitsubishi since June 2002 and as Chief Executive of
                                           the Commercial Banking Business Unit since May 2004. He
                                           served as a Managing Director of The Mitsubishi Trust and
                                           Banking Corporation from October 2001 to June 2002 and as a
                                           Managing Director of Nippon Trust Bank Limited from June
                                           2000 to September 2001. Mr. Nagayasu served as a board
                                           member of Bank of Tokyo-Mitsubishi from June 1997 to June
                                           2000 and has served as a board member since June 2002.

++Ryuichi Murata    April 12, 1948         Mr. Murata has served as a Managing Director of Bank of
                                           Tokyo-Mitsubishi since June 2003 and as Chief Executive of
                                           the Retail Banking Business Unit of Bank of Tokyo-Mitsubishi
                                           since May 2003. He served as a non-board member Managing
                                           Director of Bank of Tokyo-Mitsubishi from May 2002 to June
                                           2003 and as a non-board member Director from June 2001 to
                                           May 2002. Mr. Murata served as a board member of Bank of
                                           Tokyo-Mitsubishi from June 1998 to June 2001 and has served
                                           as a board member since June 2003.
</TABLE>

                                      93

<PAGE>

<TABLE>
<CAPTION>
Name                    Date of Birth   Business activities performed inside and outside Bank of Tokyo-Mitsubishi
----                    -------------   -------------------------------------------------------------------------
<C>                   <C>               <S>

+Yoshinobu Onishi     June 9, 1947            Mr. Onishi has served as a Managing Director of Bank of
                                              Tokyo-Mitsubishi since June 2002 and as Chief Executive of
                                              the Treasury Unit of Bank of Tokyo-Mitsubishi since May
                                              2002. He served as a non-board member Managing Director of
                                              Bank of Tokyo-Mitsubishi from May 2002 to June 2002 and
                                              also served as a non-board member Director of Bank of
                                              Tokyo-Mitsubishi from June 2001 to May 2002. Mr. Onishi
                                              served as a board member of Bank of Tokyo-Mitsubishi from
                                              June 1998 to June 2001 and has served as a board member
                                              since June 2002.

+Fumiyuki Akikusa     October 9,1949          Mr. Akikusa has served as a Managing Director of Bank of
                                              Tokyo-Mitsubishi since June 2004 and as Chief Executive of
                                              the Investment Banking & Asset Management Business Unit of
                                              Bank of Tokyo-Mitsubishi since May 2004. He served as a
                                              non-board member Managing Director of Bank of
                                              Tokyo-Mitsubishi from May 2003 to June 2004 and served as a
                                              non-board member Director from June 2001 to May 2003. Mr.
                                              Akikusa served as a board member of Bank of
                                              Tokyo-Mitsubishi from June 2000 to June 2001 and has served
                                              as a board member since June 2004.

++Tetsuo Iwata        April 30, 1948          Mr. Iwata has served as a Managing Director of Bank of
                                              Tokyo-Mitsubishi in charge of the Corporate Center since May
                                              2004. He has served as a Managing Director of Bank of
                                              Tokyo-Mitsubishi since June 2003, served as a non-board
                                              member Managing Director of Bank of Tokyo-Mitsubishi from
                                              May 2003 to June 2003 and as a non-board member Director
                                              from June 2001 to May 2003. Mr. Iwata served as a board
                                              member of Bank of Tokyo-Mitsubishi from June 1999 to June
                                              2001 and has served as a board member since June 2003. He
                                              has also served as a Director of Mitsubishi Tokyo Financial
                                              Group, Inc. since June 2003.

++Toshihiro Kashizawa September 5, 1948       Mr. Kashizawa has served as a Managing Director of Bank of
                                              Tokyo-Mitsubishi in charge of the Corporate Center since June
                                              2003. He served as a non-board member Managing Director of
                                              Bank of Tokyo-Mitsubishi in charge of the Corporate Center
                                              from May 2003 to June 2003 and served as a non-board
                                              member Director of Bank of Tokyo-Mitsubishi from June 2001
                                              to May 2003. Mr. Kashizawa has served as a board member of
                                              Bank of Tokyo-Mitsubishi since June 2003.

+Hajime Sugizaki      April 3, 1945           Mr. Sugizaki has served as a Director of Bank of
                                              Tokyo-Mitsubishi since June 2004. He has also served as a
                                              Senior Managing Director and Chief Financial Officer of
                                              Mitsubishi Tokyo Financial Group, Inc. since April 2004 and
                                              as a board member of Mitsubishi Tokyo Financial Group, Inc.
                                              since April 2001. He served as a Senior Managing Director of
                                              Mitsubishi Trust and Banking Corporation from June 2001 to
                                              April 2004 and as a Managing Director of Mitsubishi Trust and
                                              Banking Corporation from June 1999 to June 2001.
</TABLE>

                                      94

<PAGE>

The following table sets forth our corporate auditors as of July 31, 2004,
together with their respective dates of birth and positions.

<TABLE>
<CAPTION>
Name                 Date of Birth  Business activities performed inside and outside Bank of Tokyo-Mitsubishi
----                 -------------  -------------------------------------------------------------------------
<C>                 <C>             <S>
(mu)Yutaka Hasegawa October 8, 1939       Mr. Hasegawa has served as a full-time Corporate Auditor of
                                          Bank of Tokyo-Mitsubishi since June 2001. He served as
                                          President of The Diamond Business Consulting Co., Ltd. from
                                          June 1998 to June 2001 and as a Managing Director of Bank of
                                          Tokyo-Mitsubishi from April 1996 to June 1998.

hHaruo Kimura       August 9, 1943        Mr. Kimura has served as a full-time Corporate Auditor of
                                          Bank of Tokyo-Mitsubishi since June 2003. He served as a
                                          non-board member Managing Director of Bank of
                                          Tokyo-Mitsubishi from June 2001 to June 2003. Mr. Kimura
                                          also served as a Managing Director of Bank of Tokyo-
                                          Mitsubishi from June 1998 to June 2001.
</TABLE>

<TABLE>
<C>                  <C>               <S>
hYutaka Nishizawa    September 22,1950 Mr. Nishizawa has served as a full-time Corporate Auditor of
                                       Bank of Tokyo-Mitsubishi since June 2003. He served as a
                                       non-board member Director of Bank of Tokyo-Mitsubishi from
                                       June 2001 to June 2003. Mr. Nishizawa also served as a
                                       Director of Bank of Tokyo-Mitsubishi from June 2000 to June
                                       2001.

hSetsuo Uno          April 29, 1942    Mr. Uno has served as a Corporate Auditor of Bank of Tokyo-
                                       Mitsubishi and as a full-time Corporate Auditor of Mitsubishi
                                       Tokyo Financial Group, Inc. since June 2003. He served as a
                                       Senior Managing Director of Mitsubishi Tokyo Financial
                                       Group, Inc. from April 2001 to June 2003. Mr. Uno also served
                                       as a Managing Director of Bank of Tokyo-Mitsubishi from
                                       May 1997 to April 2001.

(mu)Tetsuya Nakagawa September 24,1951 Mr. Nakagawa has served as a Corporate Auditor of Bank of
                                       Tokyo-Mitsubishi since June 2004. He has also served as a
                                       Corporate Auditor of Moritex Corporation since May 1997 and
                                       has practiced as an attorney-at-law since April 1977.
</TABLE>

The following table sets forth our Directors who are not board members as of
July 31, 2004, together with their respective dates of birth and positions.

<TABLE>
<CAPTION>
Name            Date of birth Business activities performed inside and outside Bank of Tokyo-Mitsubishi
----            ------------- -------------------------------------------------------------------------
<C>             <C>           <S>

++Ichiro Terato  May 1, 1946         Mr. Terato has served as General Manager of the Osaka
                                     Commercial Banking Office of Bank of Tokyo-Mitsubishi and
                                     as a non-board member Managing Director of Bank of Tokyo-
                                     Mitsubishi since May 2003. He served as a Managing Director
                                     of Bank of Tokyo-Mistubishi from June 2000 to May 2003.
                                     Mr. Terato served as a board member of Bank of Tokyo-
                                     Mitsubishi from June 1996 to May 2003.
</TABLE>

                                      95

<PAGE>

<TABLE>
<CAPTION>
Name                   Date of birth   Business activities performed inside and outside Bank of Tokyo-Mitsubishi
----                   -------------   -------------------------------------------------------------------------
<C>                  <C>               <S>

++Shota Yasuda       July 23, 1948           Mr. Yasuda has served as Group Head of the Corporate
                                             Banking Group of Bank of Tokyo-Mitsubishi since July 2004.
                                             He has served as a non-board member Managing Director of
                                             Bank of Tokyo-Mitsubishi since May 2002. He served as a
                                             non-board member Director of Bank of Tokyo-Mitsubishi from
                                             June 2001 to May 2002 and served as a board member of Bank
                                             of Tokyo-Mitsubishi from June 1998 to June 2001.

++Kyota Ohmori       March 14,1948           Mr. Ohmori has served as Chief Executive Officer for the
                                             Americas of Bank of Tokyo-Mitsubishi and as a non-board
                                             member Managing Director of Bank of Tokyo-Mitsubishi since
                                             May 2004. He served as a Managing Director of Bank of
                                             Tokyo-Mitsubishi from June 2003 to May 2004, as a non-board
                                             member Managing Director of Bank of Tokyo-Mitsubishi from
                                             May 2003 to June 2003 and as a non-board member Director of
                                             Bank of Tokyo-Mitsubishi from June 2001 to May 2003. Mr.
                                             Ohmori served as a board member of Bank of Tokyo-
                                             Mitsubishi from June 1999 to June 2001 and from June 2003 to
                                             May 2004.

++Tadashi Yanagisawa June 10, 1946           Mr. Yanagisawa has served as Chief Executive Officer for
                                             Europe, Middle East & Africa of Bank of Tokyo-Mitsubishi
                                             and as a non-board member Managing Director of Bank of
                                             Tokyo-Mitsubishi since May 2003. He served as a non-board
                                             member Director of Bank of Tokyo-Mitsubishi from June 2001
                                             to May 2003 and as a board member of Bank of Tokyo-
                                             Mitsubishi from June 1999 to June 2001.

++Saburo Sano        May 24, 1949            Mr. Sano has served as General Manager of the Nagoya
                                             Commercial Banking Office of Bank of Tokyo-Mitsubishi and
                                             as a non-board member Managing Director of Bank of Tokyo-
                                             Mitsubishi since May 2004. He served as a non-board member
                                             Director of Bank of Tokyo-Mitsubishi from June 2001 to May
                                             2004 and as a board member of Bank of Tokyo-Mitsubishi
                                             from June 2000 to June 2001.

++Izumi Tamai        May 5, 1949             Mr. Tamai has served as General Manager of the Strategical
                                             Comprehensive Card & Credit Division of Bank of Tokyo-
                                             Mitsubishi since November 2003 and as a non-board member
                                             Managing Director of Bank of Tokyo-Mitsubishi since May
                                             2004. He served as a non-board member Director of Bank of
                                             Tokyo-Mitsubishi from June 2001 to May 2004 and as a board
                                             member of Bank of Tokyo-Mitsubishi from June 2000 to June
                                             2001.

++Tatsuo Tanaka      September 19,1949       Mr. Tanaka has served as Chief Executive Officer for China of
                                             Bank of Tokyo-Mitsubishi since August 2003 and as a non-
                                             board member Managing Director of Bank of
                                             Tokyo-Mitsubishi since May 2004. He served as a non-board
                                             member Director of Bank of Tokyo-Mitsubishi since
                                             June 2001.
</TABLE>

                                      96

<PAGE>

<TABLE>
<CAPTION>
Name                   Date of birth    Business activities performed inside and outside Bank of Tokyo-Mitsubishi
----                   -------------    -------------------------------------------------------------------------
<C>                  <C>                <S>

++Akira Tomioka      November 3, 1947        Mr. Tomioka has served as Deputy Group Head of the
                                             Corporate Banking Group of Bank of Tokyo-Mitsubishi since
                                             July 2004 and as a non-board member Managing Director of
                                             Bank of Tokyo-Mitsubishi since May 2004. He served as a
                                             non-board member Director of Bank of Tokyo-Mitsubishi from
                                             June 2001 to May 2004 and as a board member of Bank of
                                             Tokyo-Mitsubishi from June 2000 to June 2001.

++Toshiro Toyoizumi  October 26, 1949        Mr. Toyoizumi has served as a non-board member Managing
                                             Director in charge of the Credit Division and Credit
                                             Supervision Division of Bank of Tokyo-Mitsubishi since May
                                             2004 and in charge of International Credit Division of Bank of
                                             Tokyo-Mitsubishi since July 2004. He served as a non-board
                                             member Director of Bank of Tokyo-Mitsubishi from June 2001
                                             to May 2004.

++Ryusaburo Harasawa January 30, 1951        Mr. Harasawa has served as General Manager of the Systems
                                             Division of Bank of Tokyo-Mitsubishi since May 2003 and as a
                                             non-board member Director of Bank of Tokyo-Mitsubishi since
                                             June 2001.

++Nobuyuki Hirano    October 23, 1951        Mr. Hirano has served as General Manager of the Corporate
                                             Planning Office since May 2004 and as a non-board member
                                             Director of Bank of Tokyo-Mitsubishi since June 2001.

++Akira Naito        September 20, 1951      Mr. Naito has served as General Manager of the Foreign
                                             Exchange & Treasury Division of Bank of Tokyo-Mitsubishi
                                             since May 2002 and as a non-board member Director of Bank
                                             of Tokyo-Mitsubishi since June 2001.

++Yuichi Shono       June 29, 1950           Mr. Shono has served as General Manager of the European
                                             Business Division of Bank of Tokyo-Mitsubishi since
                                             May 2003 and as a non-board member Director of Bank of
                                             Tokyo-Mitsubishi since June 2001.

+Kazuhiko Hasegawa   June 5, 1952            Mr. Hasegawa has served as General Manager of the Retail
                                             Banking Development Division of Bank of Tokyo-Mitsubishi
                                             since November 2003. He served as a non-board member
                                             Director of Bank of Tokyo-Mitsubishi since June 2002.

+Junichi Ito         November 26, 1950       Mr. Ito has served as General Manager of the Credit Policy
                                             Office of Bank of Tokyo-Mitsubishi since May 2003 and as a
                                             non-board member Director of Bank of Tokyo-Mitsubishi since
                                             June 2002.

+Masami Mizuno       March 19, 1953          Mr. Mizuno has served as General Manager of the Corporate
                                             Business Development Division No. 2 of Bank of
                                             Tokyo-Mitsubishi since April 2004 and as a non-board member
                                             Director of Bank of Tokyo-Mitsubishi since June 2002.

+Takashi Morimura    June 5, 1952            Mr. Morimura has served as Vice Chairman of Union Bank of
                                             California, N.A. since May 2004 and as a non-board member
                                             Director of Bank of Tokyo-Mitsubishi since June 2002.
</TABLE>

                                      97

<PAGE>

<TABLE>
<CAPTION>
Name                 Date of birth    Business activities performed inside and outside Bank of Tokyo-Mitsubishi
----                 -------------    -------------------------------------------------------------------------
<C>                <C>                <S>

+Jun Sato          October 26, 1951         Mr. Sato has served as General Manager of the Human
                                            Resources Offices of Bank of Tokyo-Mitsubishi since
                                            May 2004 and as a non-board member Director of Bank of
                                            Tokyo-Mitsubishi since June 2002.

++Norio Kuroiwa    September 26, 1952       Mr. Kuroiwa has served as General Manager of the Corporate
                                            Risk Management Office of Bank of Tokyo-Mitsubishi since
                                            May 2002 and as a non-board member Director of Bank of
                                            Tokyo-Mitsubishi since June 2003.

++Yukiharu Kiho    February 27, 1954        Mr. Kiho has served as General Manager of the New York
                                            Branch and General Manager of the Cayman Branch of Bank
                                            of Tokyo-Mitsubishi since May 2003 and as a non-board
                                            member Director since June 2003.

++Akihiko Minato   October 16, 1953         Mr. Minato has served as a non-board member Director of
                                            Bank of Tokyo-Mitsubishi since June 2003 and has been in
                                            charge of the Human Resources Office of Bank of
                                            Tokyo-Mitsubishi since November 2003.

++Takashi Nagaoka  March 3, 1954            Mr. Nagaoka has served as General Manager of the Kyoto
                                            Commercial Banking Office of Bank of Tokyo-Mitsubishi
                                            since May 2003 and as a non-board member Director of Bank
                                            of Tokyo-Mitsubishi since June 2003.

++Hiroshi Nakamura January 10, 1953         Mr. Nakamura has served as General Manager of the
                                            Nihonbashi Commercial Banking Office of Bank of
                                            Tokyo-Mitsubishi since May 2004 and as a non-board member
                                            Director of Bank of Tokyo-Mitsubishi since June 2003.

++Tetsuya Wada     March 1, 1954            Mr. Wada has served as General Manager of the Retail
                                            Banking Planning Office of Bank of Tokyo-Mitsubishi since
                                            June 2001 and as a non-board member Director of Bank of
                                            Tokyo-Mitsubishi since June 2003.

+Takehiko Nemoto   August 20,1953           Mr. Nemoto has served as a non-board member Director of
                                            Bank of Tokyo-Mitsubishi since June 2004 and has been in
                                            charge of the Systems Division of Bank of Tokyo-Mitsubishi
                                            since July 2004.

+Takashi Nishida   September 28,1953        Mr. Nishida has served as General Manager of the Treasury &
                                            Investment Division of Bank of Tokyo-Mitsubishi and as a
                                            non-board member Director of Bank of Tokyo-Mitsubishi since
                                            June 2004.

+Toshiaki Arai     February 1,1954          Mr. Arai has served as Regional Head for Hong Kong and
                                            General Manager of the Hong Kong Branch of Bank of Tokyo-
                                            Mitsubishi since August 2003 and as a non-board member
                                            Director of Bank of Tokyo-Mitsubishi since June 2004.

+Takashi Kimura    September 1,1954         Mr. Kimura has served as General Manager of the Corporate
                                            Business Planning Division of Bank of Tokyo-Mitsubishi since
                                            April 2004 and as a non-board member Director of Bank of
                                            Tokyo-Mitsubishi since June 2004.
</TABLE>

                                      98

<PAGE>

<TABLE>
<CAPTION>
Name                  Date of birth   Business activities performed inside and outside Bank of Tokyo-Mitsubishi
----                  -------------   -------------------------------------------------------------------------
<C>                  <C>              <S>
+Michitaka Mukouhara November 3,1954       Mr. Mukouhara has served as General Manager of the Credit
                                           Division of Bank of Tokyo-Mitsubishi since May 2004 and as a
                                           non-board member Director of Bank of Tokyo-Mitsubishi since
                                           June 2004.

++Atsushi Nakaishi   December 14,1953      Mr. Nakaishi has served as General Manager of the Securities
                                           Investment Division of Bank of Tokyo-Mitsubishi since
                                           February 2003 and as a non-board member Director of Bank of
                                           Tokyo-Mitsubishi since June 2004.

+Minoru Shimada      February 22,1955      Mr. Shimada has served as General Manager of the Corporate
                                           Banking Division No. 2 of Bank of Tokyo-Mitsubishi since
                                           July 2004 and as a non-board member Director of Bank of
                                           Tokyo-Mitsubishi since June 2004.

+Masaaki Tanaka      April 1,1953          Mr. Tanaka has served as General Manager of the Corporate
                                           Business Development Division No. 1 of Bank of
                                           Tokyo-Mitsubishi since May 2004 and as General Manager of
                                           the Corporate Banking Division No. 3 of Bank of
                                           Tokyo-Mitsubishi since July 2004. He has also served as a non-
                                           board member Director of Bank of Tokyo-Mitsubishi since
                                           June 2004.
</TABLE>
--------
++ Term Expires 2005.
+ Term Expires 2006.
h Term Expires 2007.
(mu) Term Expires 2008.

B. Compensation

An aggregate of (Yen)430 million was paid by us as remuneration, including
bonuses but excluding retirement allowances, during the fiscal year ended March
31, 2004 to our directors and corporate auditors, which included remuneration
from our subsidiaries.

In accordance with customary Japanese business practice, when a director or
corporate auditor retires, a proposal to pay a retirement allowance is
submitted at the annual ordinary general meeting of shareholders for approval.
After the shareholders' approval is obtained, the retirement allowance for a
director or corporate auditor is fixed by the board of directors or by
consultation among the corporate auditors in accordance with our internal
regulations and practice and generally reflects the position of the director or
corporate auditor at the time of retirement, the length of his service as a
director or corporate auditor and his contribution to our performance. We do
not set aside reserves for any such retirement payments for directors and
corporate auditors. During the fiscal year ended March 31, 2004, we paid an
aggregate of (Yen)1,471 million as an allowance to our directors and corporate
auditors who have retired.

We have not implemented a stock option plan. We have a pension foundation for
our employees pursuant to the Welfare Pension Insurance Law of Japan. Under
this scheme, our employees (and in some cases, relatives of our employees) are
entitled to receive pensions and/or lump-sum payments from our pension
foundation under the conditions set forth in its rules. Pensions paid by the
pension foundation comprise the portion which basically corresponds to pensions
that would be payable by the Japanese government to our employees if there were
not a pension foundation, and the portion which is paid in addition to the
government portion. Although our directors and corporate auditors are eligible
for the government portion, they are not entitled to receive the additional
portion in respect of their tenure as our directors and corporate auditors.

                                      99

<PAGE>

C. Board Practices

Our Articles of Incorporation provides that the number of directors shall not
exceed 20 and that the number of corporate auditors shall not exceed eight. Our
shareholders elect directors usually at our annual ordinary general meeting of
shareholders for staggered two-year terms. Our shareholders also elect
corporate auditors usually at our annual ordinary general meeting of
shareholders for four-year terms.

We currently have fourteen directors, including one external director. Our
board of directors has ultimate responsibility for the administration of our
affairs. Our board of directors is empowered to appoint by resolution
representative directors from among the directors who may represent us
severally. Our board of directors may also appoint from their members by
resolution a chairman, a deputy chairman, a president, deputy presidents,
senior managing directors and managing directors. Deputy presidents assist the
president. Senior managing directors and the managing directors assist the
president and deputy presidents, if any, in the management of our day-to-day
business.

There are no contracts between any of our directors and us providing for
benefits upon termination of their employment.

Under the Commercial Code, directors must refrain from engaging in any business
that is in competition with us unless approved by a board resolution, and no
director may vote on a proposal, arrangement or contract in which that director
is deemed to be materially interested.

Neither the Commercial Code nor our Articles of Incorporation contain special
provisions as to the borrowing power exercisable by a director, to the
retirement age of our directors and corporate auditors or to a requirement of
our directors and corporate auditors to hold any shares of our capital stock.

The Commercial Code requires a resolution of the board of directors for a
company to acquire or dispose of material assets, to borrow substantial amounts
of money, to employ or discharge important employees, such as executive
officers, and to establish, change or abolish material corporate organizations,
such as a branch office.

We currently have five corporate auditors, including one external corporate
auditor. Our corporate auditors, who are not required to be certified public
accountants, have various statutory duties, including principally:

..   the examination of the financial statements, business reports, proposals
    and other documents which our board of directors prepares and submits to a
    general meeting of shareholders;

..   the examination of our directors' administration of our affairs; and

..   the preparation and submission of a report on their examination to a
    general meeting of shareholders.

Our corporate auditors are obliged to attend meetings of our board of
directors. They may make statements at the meetings if they deem necessary,
although they are not entitled to vote at the meetings. The Law Concerning
Special Exceptions from the Commercial Code Relating to Audit, etc. of
Joint-Stock Corporations provides that there may not be less than three
corporate auditors. One or more corporate auditors, who are required to serve
on a full-time basis, must be designated by the corporate auditors from among
their members. At least one of the corporate auditors must be a person who has
not been an employee or a director of us or any of our subsidiaries within the
previous five years. After the close of the annual ordinary general meeting of
shareholders to be held in June 2006, at least half of our corporate auditors
must be "external corporate auditors" who have not been an employee or a
director of us or any of our subsidiaries for five years.

For additional information on our board practices, see "Item 6.A. Directors,
Senior Management and Employees--Directors and Senior Management."

                                      100

<PAGE>

D. Employees

As of March 31, 2004, we had approximately 36,500 employees, compared to
approximately 37,100 as of March 31, 2003 and 34,600 as of March 31, 2002. In
addition, as of March 31, 2004, we had approximately 10,900 part-time and
temporary employees. The following tables show the percentages of our employees
in our different business units and geographically, as of March 31, 2004. Most
of our employees are members of our employee's union, which negotiates on
behalf of employees in relation to remuneration and working conditions.

<TABLE>
<CAPTION>
     Business unit
     <S>                                                               <C>
     Retail Banking...................................................  20%
     Commercial Banking...............................................   9
     Global Corporate Banking.........................................  14
     Investment Banking and Asset Management and Mitsubishi Securities  15
     UnionBanCal Corporation..........................................  28
     Operation Services...............................................   5
     Treasury.........................................................   2
     Other units......................................................   7
                                                                       ---
                                                                       100%
                                                                       ===
</TABLE>

<TABLE>
<CAPTION>
                       Location
                       <S>                          <C>
                       Japan.......................  60%
                       United States...............  29
                       Europe......................   3
                       Asia/Oceania excluding Japan   7
                       Other areas.................   1
                                                    ---
                                                    100%
                                                    ===
</TABLE>

E. Share Ownership

All of our outstanding shares of common stock and preferred stock are owned by
Mitsubishi Tokyo Financial Group, Inc.

Item 7. Major Shareholders and Related Party Transactions.

A. Major Shareholders

All of our outstanding shares of common stock and preferred stock are owned by
Mitsubishi Tokyo Financial Group, Inc.

B. Related Party Transactions

We had, and expect to have in the future, banking transactions and other
transactions in the ordinary course of business with our related parties.
Although for the fiscal year ended March 31, 2004, such transactions included,
but were not limited to, call money, loans, electronic data processing, leases
and management of properties, those transactions were immaterial, and were made
at prevailing market rates, terms and conditions and do not involve more than
the normal risk of collectibility or present other unfavorable features. In
addition, we enter into various arrangements with Mitsubishi Trust Bank, our
affiliate, which, like us, is a wholly-owned subsidiary of Mitsubishi Tokyo
Financial Group, Inc.

None of our directors, executive officers or corporate auditors, and none of
the close members of their respective families, has had any transactions or has
any presently proposed transactions that are material or any transactions that
are unusual in their nature or conditions, involving goods, services or
tangible or intangible assets, to which we were, are or will be, a party.

                                      101

<PAGE>

No loans have been made to our directors or corporate auditors other than in
the normal course of business, on normal commercial terms and conditions. In
addition, since July 2002, no loans have been made to our directors or
corporate auditors other than as permitted under Section 13(k) of the U.S.
Securities Exchange Act and Rule 13k-1 promulgated thereunder.

No family relationship exists among any of our directors or corporate auditors.
No arrangement or understanding exists between any of our directors or
corporate auditors and any other person pursuant to which any director or
corporate auditor was elected to their position with us.

C. Interests of Experts and Counsel

Not Applicable.

Item 8. Financial Information.

A. Consolidated Statements and Other Financial Information

The information required by this item is set forth in our consolidated
financial statements starting on page F-1 of this Annual Report and in
"Selected Statistical Data" starting on page A-1 of this Annual Report.

Legal Proceedings

From time to time, we are involved in various litigation matters. Based on our
current knowledge and consultation with legal counsel, we believe the current
litigation matters, when ultimately determined, will not have a material
adverse effect on our results of operations and financial position.

Distributions

Our board of directors recommendations an annual dividend for our shareholders'
approval at the ordinary general meeting of shareholders customarily held in
June of each year. The annual dividend is usually distributed immediately
following shareholders' approval to holders of record at the end of the
preceding fiscal year. In addition to annual dividends, we may make cash
distributions by way of interim dividends from our retained earnings as of the
end of the preceding fiscal year to shareholders of record as of September 30
of each year by resolution of our board of directors. We paid an annual
dividend of (Yen)7.73 per share of common stock and (Yen)123.75 per share of
preferred stock for the fiscal year ended March 31, 2004.

B. Significant Changes

No significant changes have occurred since the date of our consolidated
financial statements included in this Annual Report.

Item 9. The Offer and Listing.

A. Offer and Listing Details

All of our outstanding shares of common stock are owned by Mitsubishi Tokyo
Financial Group, Inc.

B. Plan of Distribution

Not applicable.

C. Markets

Not applicable.

                                      102

<PAGE>

D. Selling Shareholders

Not applicable.

E. Dilution

Not applicable.

F. Expenses of the Issue

Not applicable.

Item 10. Additional Information.

A. Share Capital

Not applicable.

B. Memorandum and Articles of Association

Our Corporate Purpose

Article 2 of our Articles of Incorporation provides that our corporate purpose
is to carry on the following businesses:

(1) To accept deposits and installment savings, to extend loans, to discount
    bills and notes and to engage in exchange transactions;

(2) To guarantee obligations of others, to accept bills and to engage in any
    other business incidental to the banking purposes listed in the preceding
    clause 1;

(3) To underwrite, to conduct offerings for subscription and sale of, to buy
    and sell, and engage in any other business with respect to, government
    bonds, municipal bonds, government-guaranteed bonds and any other
    securities;

(4) To engage in, in addition to the business enumerated in any of the
    preceding clauses, all business that a bank is permitted to engage in under
    the Banking Law, the Secured Bonds Trust Law, the Law on Recording of Bonds
    or any other applicable law; and

(5) To engage in any other business incidental to, or relating to any of, the
    businesses mentioned in any of the preceding clauses.

Board of Directors

For discussion of the provisions of our Articles of Incorporation as they apply
to our directors, see "Item 6.C. Directors, Senior Management and
Employees--Board Practices."

Common Stock

We summarize below the material provisions of our Articles of Incorporation,
our share handling regulations and the Commercial Code as they relate to joint
stock companies. Because it is a summary, this discussion should be read
together with our Articles of Incorporation and share handling regulations,
which have been filed as exhibits to this Annual Report.

                                      103

<PAGE>

General

A joint stock company is a legal entity incorporated under the Commercial Code.
The investment and rights of the shareholders of a joint stock company are
represented by shares of stock in the company and shareholders' liability is
limited to the amount of the subscription for the shares.

Our authorized common share capital is 8,000,000,000 shares of common stock
with no par value. As of March 31, 2004, a total of 5,019,469,546 shares of
common stock were issued. Each of the shares issued and outstanding is fully
paid and non-assessable.

We may issue shares from our authorized but unissued share capital following a
resolution to that effect by our board of directors. An increase in our
authorized share capital is only possible by amendment of our Articles of
Incorporation, which generally requires shareholders' approval.

Under the Commercial Code, shares must be registered and are transferable by
delivery of share certificates. In order to assert shareholders' rights against
us, a shareholder must have its name and address registered on our register of
shareholders, in accordance with our share handling regulations.

Dividends

Dividends are distributed in proportion to the number of shares owned by each
shareholder on the record date for the dividend. Dividends for each financial
period may be distributed following shareholders' approval at a general meeting
of shareholders.

Payment of dividends on common stock is subject to the preferential dividend
rights of holders of preferred stock.

Under our Articles of Incorporation, our financial accounts are closed on March
31 of each year, and dividends, if any, are paid to shareholders of record at
March 31 following shareholders' approval at a general meeting of shareholders.
In addition to year-end dividends, our board of directors may by resolution
declare an interim cash dividend to shareholders of record as of September 30
of each year. Under the Commercial Code and the Banking Law, we may distribute
annual or interim dividends only if:

..   we have set aside in our legal reserve an amount equal to at least
    one-fifth of the annual dividend and any other amount paid by us as an
    appropriation of retained earnings or of any interim dividend, as the case
    may be; or

..   the sum of the amount in our legal reserve and additional paid-in capital
    is at least equal to our stated capital.

We may distribute annual or interim dividends out of the excess of our net
assets, on a non-consolidated basis, over the aggregate of:

(1) our stated capital;

(2) our additional paid-in capital;

(3) our accumulated legal reserve;

(4) the legal reserve to be set aside in respect of the dividend concerned and
    any other proposed payment by way of appropriation of retained earnings;

(5) the excess, if any, of unamortized expenses incurred in preparation for the
    commencement of business and in connection with research and development
    over the aggregate of the amounts referred to in (2), (3) and (4) above;

(6) subscription money for new shares, or security money to be applied to such
    subscription money, if any, recorded on our balance sheet;

                                      104

<PAGE>

(7) if assets are stated at market value on our balance sheet, the excess, if
    any, of the aggregate market value over the aggregate acquisition cost of
    those assets; and

(8) the balance, if any, recorded on our balance sheet as a result of
    reevaluating land we own for business purposes.

In the case of interim dividends, starting in September 2003, if we decrease
our stated capital or our legal reserve after the preceding fiscal year end,
any such decreased figure shall be applied to (1) and (3) above.

In the case of interim dividends, net assets are calculated by reference to the
balance sheet as of the end of the preceding fiscal year, adjusted to reflect:

..   any subsequent payment by way of appropriation of retained earnings and
    transfer to legal reserve in respect of such payment;

..   any subsequent transfer of retained earnings to stated capital; and

..   if we have been authorized, pursuant to a resolution of an ordinary general
    meeting of shareholders or the board of directors, to repurchase our own
    shares, the total amount of the repurchase price for those shares that may
    be paid by us.

Interim dividends may not be paid if there is a risk that at the end of the
fiscal year, there may not be any excess of net assets over the aggregate of
the amounts referred to in (1) through (8) above.

In Japan, the "ex-dividend" date and the record date for any dividends precede
the date of determination of the amount of the dividend to be paid. The market
price of shares generally becomes ex-dividend on the third business day prior
to the record date.

Under our Articles of Incorporation, we are not obliged to pay any dividends or
interim dividends that are left unclaimed for a period of five years after the
date on which they first became payable.

New Unit Share System

The new unit share system (tan-gen kabu) was introduced by amendments to the
Commercial Code, which became effective on October 1, 2001. Our Articles of
Incorporation provide that 1,000 shares constitute one unit of shares
regardless of whether the shares are shares of common stock or shares of
preferred stock. Our board of directors is permitted to reduce the number of
shares constituting a unit or to abolish the unit system with respect to the
shares in its entirety by amending our Articles of Incorporation without
approval by shareholders. The number of shares constituting a unit is not
permitted to exceed 1,000 shares or one two-hundredth (1/200) of the number of
all issued shares, whichever is smaller. Our Articles of Incorporation provide
that no share certificates shall be issued with respect to any shares
constituting less than one unit. Consequently, no certificates for shares other
than a full unit or an integral multiple thereof will be issued unless we
determine that is necessary to issue such certificates for the protection of
the holders of shares constituting less than one unit. As the transfer of
shares normally requires delivery of the relevant share certificates, any
fraction of a unit for which no share certificates are issued will not be
transferable. A holder of shares constituting less than one unit may require us
to purchase such shares at a price mutually agreed upon. Under this system, a
shareholder will have one vote for each unit of shares held by it. Shares not
constituting a full unit will carry no voting rights. For calculation of the
quorum for various voting purposes, we will exclude the aggregate number of
shares representing less than one unit from the number of voting rights. A
holder of shares representing one or more whole units will have one vote for
each one unit of shares, except as stated in "--Voting Rights." Except as
otherwise described above, holders of shares constituting less than one unit
will have all the rights granted to shareholders under the Commercial Code.

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General Meeting of Shareholders

The ordinary general meeting of our shareholders is usually held in June of
each year in Chiyoda-ku, Tokyo. In addition, we may hold an extraordinary
general meeting of shareholders whenever necessary by giving at least two
weeks' advance notice to shareholders.

Voting Rights

A shareholder has one voting right for each unit of shares held by it. However,
a corporate shareholder may not exercise its voting rights if we hold more than
one quarter of the total voting rights with respect to that shareholder. Under
our Articles of Incorporation, except as otherwise provided by law or by other
provisions of our Articles of Incorporation, a resolution can be adopted at a
shareholders' meeting by the holders of a majority of the voting rights
represented at the meeting. The Commercial Code and our Articles of
Incorporation require a quorum of not less than one third of the total number
of voting rights for election of our directors and corporate auditors.

The Commercial Code and our Articles of Incorporation provide that a quorum of
not less than one third of outstanding voting rights, excluding those owned by
our subsidiaries and affiliates of which we own, directly or indirectly, more
than 25 percent, must be present at a shareholders' meeting to approve
specified corporate actions, such as:

..   the amendment of our Articles of Incorporation, except in some limited
    cases;

..   the removal of a director or corporate auditor;

..   a dissolution, merger or consolidation, except for certain types of mergers;

..   a stock-for-stock exchange or stock-for-stock transfer, except in some
    limited circumstances;

..   the transfer of the whole or an important part of our business;

..   a reduction of stated capital;

..   a corporate split, except in some limited circumstances;

..   the acquisition of the whole business of another company, except in some
    limited circumstances;

..   the offering to persons other than shareholders of stock at a specially
    favorable price, or of stock acquisition rights or bonds or notes with
    stock acquisition rights with specially favorable conditions; and

..   the repurchase of our own stock from a specific party.

At least two-thirds of the voting rights represented at the meeting must
approve these actions.

There is no cumulative voting for the election of directors or corporate
auditors. For a discussion of voting rights with respect to our directors, see
"Item 6.C. Directors, Senior Management and Employees--Board Practices."

Subscription Rights

Holders of shares have no preemptive rights under our Articles of
Incorporation. Under the Commercial Code, however, our board of directors may
determine that shareholders be given subscription rights in connection with a
particular issue of new shares. In this case, these subscription rights must be
given on uniform terms to all shareholders as of a specified record date by
public notice at least two weeks prior to the record date. A notification to
each individual shareholder must also be given at least two weeks prior to the
date of expiration of the subscription rights.

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Rights to subscribe for new shares may be transferable or non-transferable, as
determined by our board of directors. If subscription rights are not
transferable, a purported transfer by a shareholder will not be enforceable
against us.

Stock Acquisition Rights

We may issue stock acquisition rights (shinkabu yoyakuken), which in the U.S.
are often in the form of warrants, or bonds with stock acquisition rights that
cannot be detached (shinkabu yoyakuken-tsuki shasai), which in the U.S. are
often in the form of convertible bonds or bonds with non-detachable warrants.
Except where the issuance would be on "specially favorable" terms, the issuance
of stock acquisition rights or bonds with stock acquisition rights may be
authorized by a resolution of our board of directors. Upon exercise of the
stock acquisition rights, the holder of such rights may either acquire shares
by paying the applicable exercise price or, if so determined by a resolution of
our board of directors, by making a substitute payment, such as having the
convertible bonds redeemed for no cash in lieu of the exercise price.

Liquidation Rights

Upon our liquidation, the assets remaining after payment of all debts,
liquidation expenses, taxes and preferred distributions to holders of shares of
our preferred stock will be distributed among the holders of our common stock
in proportion to the number of shares they own.

Transfer Agent

Mitsubishi Trust Bank is the transfer agent for our common stock. The office of
Mitsubishi Trust Bank for this purpose is located at 11-1, Nagatacho 2-chome,
Chiyoda-ku, Tokyo, 100-8212, Japan. Mitsubishi Trust Bank maintains our
register of shareholders and our register of lost share certificates, and
records transfers of ownership upon presentation of share certificates.

Reports to Shareholders

We furnish to our shareholders notices, in Japanese, of shareholders' meetings,
annual business reports, including our financial statements, and notices of
resolutions adopted at our shareholders' meetings.

Record Dates and Closing of Shareholders' Register

As stated above, March 31 is the record date for the payment of annual
dividends, if any, and September 30 is the record date for the payment of
interim dividends, if any. In addition, by a resolution of our board of
directors and after giving at least two weeks' prior public notice, we may at
any time set a record date or close the shareholders' register temporarily, for
a period not in excess of three months, in order to determine the shareholders
who are entitled to the rights pertaining to our shares. The trading of our
shares and the delivery of certificates may continue even while the
shareholders' register is closed.

Repurchase of Our Shares of Common Stock

We may repurchase our own shares:

..   from a specific party, if authorized by a special resolution of an ordinary
    general meeting of shareholders or

..   from subsidiaries, if authorized by a resolution of the board of directors.

When the repurchase is made by us from a specific party, as authorized by a
special resolution of an ordinary general meeting of shareholders, any
shareholder may make a demand to a director, five days or more prior to the
relevant shareholders' meeting, that we also repurchase the shares held by that
shareholder.

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Repurchase of our own shares from persons other than our subsidiaries must
satisfy various specified requirements, including that the total amount of the
repurchase price may not exceed the amount of the retained earnings available
for annual dividend payments after taking into account a reduction, if any, of
the stated capital, additional paid-in capital or legal reserve (if such
reduction of the stated capital, additional paid-in capital or legal reserve
has been authorized pursuant to a resolution of the relevant ordinary general
meeting of shareholders), minus the amount to be paid by way of appropriation
of retained earnings for the relevant fiscal year and the amount to be
transferred to stated capital. If we repurchase shares from subsidiaries, the
total amount of the repurchase price may not exceed the amount of the retained
earnings available for interim dividend payments minus the amount of interim
dividends, if paid. If it is anticipated that the net assets on our balance
sheet as at the end of the relevant fiscal year will be less than the aggregate
amount of the stated capital, additional paid-in capital and other items as
described in (1) through (8) in the fourth paragraph under "--Dividends," we
may not repurchase our own shares.

We may hold our own shares so repurchased without restrictions. In addition, we
may cancel or dispose of our own shares that we hold by a resolution of our
board of directors. As of March 31, 2004, we, excluding our subsidiaries, did
not own any treasury shares.

Preferred Stock

The following is a summary of information concerning the shares of our
preferred stock, including brief summaries of the relevant provisions of our
Articles of Incorporation, the share handling regulations and the Commercial
Code as currently in effect. The detailed rights of our preferred shares are
set out in our Articles of Incorporation and the resolutions of our board of
directors relating to the issuance of the relevant stock.

General

Under our Articles of Incorporation, we are authorized to issue 100,000,000
shares of one class of preferred shares. Our preferred shares have equal
preference over shares of our common stock in respect of dividend entitlements
and distribution upon our liquidation, but holders of our preferred shares are
not entitled to vote at general meetings of shareholders, subject to the
exceptions provided under the Commercial Code. As of March 31, 2004, 81,400,000
preferred shares were outstanding. We may, at any time, purchase and redeem, at
fair value, any shares of preferred stock outstanding out of earnings available
for distribution to shareholders.

Our preferred shares are not convertible into our common stock, but are
redeemable at our option. The redemption terms are determined by our board of
directors at the time of issuance.

Preferred Dividends

In priority to the payment of dividends to holders of our common stock, the
amount of preferred dividends are set by resolution of our board of directors
at the time of issuance. The amount of preferred dividends may not exceed
(Yen)360 per share. In the event that our board of directors determines to pay
an interim dividend to holders of our common stock, we will, in priority to the
payment of that interim dividend, pay a preferred interim dividend, not
exceeding (Yen)180 per share, to holders of our preferred shares and the amount
of that preferred interim dividend will be deducted from the preferred dividend
payable on preferred shares in respect of the same fiscal year.

No payment of dividends on our preferred shares or any other shares can be made
unless we have sufficient retained earnings and, in the case of annual
preferred dividends, the shareholders at the relevant ordinary general meeting
of shareholders or, in the case of preferred interim dividends, the board of
directors, resolves to distribute the retained earnings.

Dividends on our preferred shares are non-cumulative. If the full amount of any
dividend is not declared on our preferred shares in respect of any fiscal year,
holders of our preferred shares do not have any right to receive

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<PAGE>

dividends in respect of the deficiency in any subsequent fiscal year, and we
will have no obligation to pay the deficiency or to pay any interest whether or
not dividends are paid in respect of any subsequent fiscal year. The holders of
our preferred shares are not entitled to any further dividends or other
participation in or distribution of our profits.

Liquidation Rights

In the event of our voluntary or involuntary liquidation, holders of our
preferred shares will be entitled to receive out of our residual assets upon
liquidation a distribution of (Yen)3,000 per share before any distribution of
assets is made to holders of our common stock. The holders of our preferred
shares are not entitled to any further dividends or other participation in or
distribution of our residual assets upon our liquidation.

Voting Rights

No holder of our preferred shares has the right to receive notice of, or to
vote at, a general meeting of shareholders, except as otherwise specifically
provided under the Commercial Code or other applicable law. Under the
Commercial Code, holders of a unit of our preferred shares will be entitled to
receive notice of, and have one voting right per unit of preferred shares at,
our general meetings of shareholders:

..   from the commencement of any ordinary general meeting of shareholders if an
    agenda for approval to declare a preferred dividend is not submitted to
    such meeting or

..   from the close of any ordinary general meeting of shareholders if a
    proposed resolution to declare a preferred dividend is not approved at such
    meeting until such time as a resolution of an ordinary general meeting of
    shareholders declaring a preferred dividend is passed.

C. Material Contracts

Other than as described in this Annual Report, all contracts entered into by us
in the past two years were entered into in the ordinary course of business.

D. Exchange Controls

There are no material exchange controls applicable to payments on our debt
securities.

E. Taxation

Japanese Taxation

The following sets forth the material Japanese tax consequences to owners of
our debt securities who are non-resident individuals or non-Japanese
corporations without a permanent establishment in Japan to which the relevant
income is attributable, which we refer to as "non-resident holders" in this
section. The statements regarding Japanese tax laws below are based on the laws
in force and as interpreted by the Japanese taxation authorities as at the date
of this Annual Report and are subject to changes in the applicable Japanese
laws, double taxation treaties, conventions or agreements or interpretations
thereof occurring after that date. This summary is not exhaustive of all
possible tax considerations that may apply to a particular investor, and
potential investors are advised to satisfy themselves as to the overall tax
consequences of the acquisition, ownership and disposition of our debt
securities, including specifically the tax consequences under Japanese law, the
laws of the jurisdiction of which they are resident and any tax treaty between
Japan and their country of residence, by consulting their own tax advisers.

Payment of interest of our debt securities issued from April 1, 1998 to March
31, 2006 outside Japan by us or our paying agents to non-resident holders of
debt securities will be exempt from Japanese withholding tax. In order

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to be exempt from Japanese withholding tax, each non-resident holder must
comply with the procedures for establishing its status in accordance with the
requirements of Japanese law. If the exemption is not extended by future
legislation, or if similar exemption is not available after March 31, 2006,
interest of our debt securities issued after that date would be subject to
Japanese withholding tax.

Under current Japanese practice, we and our paying agents may determine our
withholding obligations in respect of our debt securities held through a
qualified clearing organization in reliance on certifications we received from
the qualified clearing organization. In this case, we do not need to obtain
certificates directly from the ultimate beneficial owners of the debt
securities. As part of the procedures under which these certifications are
given, a beneficial owner may be required to establish that it is a
non-resident holder to the person or entity through which it holds our debt
securities. If a non-resident holder is required to establish its identity and
residence, such holder will be required to deliver to our paying agents a claim
for exemption from Japanese withholding tax and documentation concerning its
identity and residence in order to receive an interest payment on our debt
securities free of Japanese withholding tax. We or our paying agents may adopt
modified or supplemental certification procedures to the extent necessary to
comply with changes in Japanese law or administrative practice.

Gains derived from the sale of our debt securities within or outside Japan by a
non-resident holder are, in general, not subject to Japanese income or
corporation taxes or other Japanese taxes.

Japanese inheritance and gift taxes at progressive rates may be payable by an
individual, regardless of his or her place or residence, who has acquired debt
securities as a legatee, heir or donee, even if neither the individual nor the
decedent nor the donor is a Japanese resident. No stamp, issue, registration or
similar taxes or duties, will, under present Japanese law, be payable by
holders of our debt securities in connection with the issue of the debt
securities.

There are no Japanese taxes payable on the conversion of convertible debt
securities.

U.S. Taxation

The following sets forth the material United States federal income tax
consequences of the ownership of our debt securities by a U.S. holder, as
defined below. This summary is based on United States federal income tax laws,
including the United States Internal Revenue Code of 1986, or the Code, its
legislative history, existing and proposed Treasury regulations thereunder,
published rulings and court decisions, and on the Convention between the United
States of America and Japan for the Avoidance of Double Taxation and the
Prevention of Fiscal Evasion with respect to Taxes on Income, or the Tax
Convention, all of which are subject to change, possibly with retroactive
effect.

The following summary is not a complete analysis or description of all
potential United States federal income tax consequences to a particular U.S.
holder. It does not address all United States federal income tax considerations
that may be relevant to all categories of potential purchasers, certain of
which (such as banks or other financial institutions, insurance companies,
dealers in securities, tax exempt entities, non U.S. persons, persons holding a
debt security as part of a "straddle," "hedge," conversion or integrated
transaction, holders whose "functional currency" is not the US dollar, persons
holding debt securities through a partnership or other pass through entity,
U.S. expatriates, holders liable for alternative minimum tax and holders of 10%
or more of our voting shares) are subject to special tax treatment. This
summary also does not address any foreign, state, local or other tax
consequences of an investment in our debt securities. This summary assumes that
investors will hold our debt securities as capital assets within the meaning of
Section 1221 of the Code.

As used herein, a "U.S. holder" of a debt security means a holder that is for
U.S. federal income tax purposes:

..   a citizen or resident of the United States,

..   a corporation created or organized under the laws of the United States or
    any political subdivision thereof,

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..   an estate, the income of which is subject to U.S. federal income tax
    regardless of its source, or

..   a trust

..   the administration of which is subject to the primary supervision of a
    court within the United States and one or more United States persons has
    the authority to control all substantial decisions of the trust or

..   that has a valid election in effect under applicable U.S. Treasury
    regulations to be treated as a United States person.

A Non U.S. holder is a holder, other than an entity treated as a partnership,
that is not a U.S. holder. The following summary does not address the tax
consequences to a Non U.S. holder. U.S. holders should consult their own tax
advisors concerning the application of the following rules to their particular
situations, as well as the tax consequences to them under the laws of any other
taxing jurisdiction.

Interest. Interest paid on our debt securities will generally be taxable to a
U.S. holder as ordinary interest income at the time it is received or accrues,
in accordance with such U.S. holder's regular method of accounting for U.S.
federal income tax purposes. In addition to interest on our debt securities, a
U.S. holder will be required to include in income any additional amounts and
any tax withheld from interest payments notwithstanding that such withheld tax
is not in fact received by such U.S. holder. With respect to any tax withheld
under Japanese law, a U.S. holder may be entitled to deduct or credit tax
withheld at the rate under the Tax Convention, subject to applicable
limitations in the Code, including that the election to deduct or credit
foreign taxes applies to all of the U.S. holder's foreign taxes for a
particular year. For foreign tax credit limitation purposes, interest income,
including Japanese taxes withheld therefrom, if any, and additional amounts,
paid on our debt securities will be income from sources outside the United
States. However, this generally will be treated separately, together with other
items of "passive income" or, in the case of certain U.S. holders, "financial
service income." The rules governing the foreign tax credit are complex. U.S.
holders are urged to consult their tax advisors regarding the availability of
the foreign tax credit under their particular circumstances.

Market Discount. A debt security purchased by an investor other than an initial
holder may be subject to the market discount provisions of the Code. Market
discount is the excess, if any, of the adjusted issue price of a debt security
over its basis in the purchaser's hands immediately after the purchase.
However, a debt security will not be treated as having market discount if, at
the time of purchase, the discount is less than  1/4 of 1% of the adjusted
issue price of the debt security, multiplied by the number of complete years
remaining to maturity.

If a U.S. holder purchases a debt security with market discount, such U.S.
holder may elect to include such market discount in income as the discount
accrues. This election, once made, applies to all market discount obligations
acquired by such U.S. holder during or after the taxable year in which the
election is made and may not be revoked without the consent of the Internal
Revenue Service. Accrued market discount may be calculated in either of two
ways. Under the ratable method, accrued market discount at the time of
disposition or maturity is the total market discount multiplied by a fraction,
the numerator of which is the number of days the U.S holder has held the debt
security and the denominator of which is the number of days from the date such
U.S. holder acquired the debt security until its maturity date. Alternatively a
U.S. holder may elect to use the constant yield method. Such an election
applies only to the debt security for which the election is made and is
irrevocable.

If a U.S. holder acquires a debt security with market discount and does not
elect (and is not deemed to have elected) to include such market discount in
income currently, such U.S. holder will recognize as ordinary income the lesser
of the amount of gain or the accrued market discount realized by such U.S.
holder when the debt security matures or is disposed of by such U.S. holder. A
market discount debt security given as a gift or redeemed by us will be treated
as having been sold for its fair market value. If a U.S. holder incurs or
maintains indebtedness to purchase or carry a market discount debt security to
which a current inclusion election does not apply, such U.S. holder must defer
a portion of any interest expense on such indebtedness until the earlier of the
maturity of the debt security or the disposition of the debt security in a
taxable transaction.

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Sales or other dispositions. A U.S. holder will generally recognize gain or
loss on the sale, retirement or other taxable disposition of our debt
securities in an amount equal to the difference between the amount realized
from such sale, retirement or other taxable disposition, other than amounts
attributable to accrued but unpaid interest, which will be taxed as interest
and the U.S. holder's adjusted tax basis in our debt securities. Such gain or
loss will be long term capital gain or loss if the holding period for our debt
securities exceeds one year at the time of disposition. The ability to deduct
capital losses may be limited. For purposes of determining a U.S. holder's
allowable foreign tax credit, gain realized by a U.S. holder that is a U.S.
resident, as defined in Section 865 of the Code, will generally be U.S. source
income. However, disposition losses attributable to a foreign office or
recognized by a U.S. citizen or resident alien with a foreign tax home will
generally be treated as foreign source if the highest marginal rate in such
foreign country is at least 10%. Special rules apply in determining the source
of other types of loss such as loss attributable to accrued but unpaid
interest, and U.S. holders should consult their tax advisors regarding the
treatment of such items in their particular situations.

Information reporting and backup withholding. Proceeds from the sale,
retirement or other disposition of our debt securities, or payments of
principal and interest on our debt securities, may be subject to information
reporting requirements. Those proceeds or interest payments may also be subject
to backup withholding unless the U.S. holder:

..   is a corporation or comes within other categories of exempt recipients,
    and, when required, demonstrates this fact or

..   provides a correct taxpayer identification number on a properly completed
    Internal Revenue Service Form W 9 or substitute form, certifies that the
    U.S. holder is not subject to backup withholding and otherwise complies
    with applicable requirements of the backup withholding rules.

Any amount withheld under these rules will be creditable against the U.S.
holder's United States federal income tax liability or refundable to the extent
that it exceeds such liability if the U.S. holder provides the required
information to the Internal Revenue Service. If a U.S. holder is required to
and does not provide a correct taxpayer identification number, the U.S. holder
may be subject to penalties imposed by the Internal Revenue Service.

We urge U.S. holders to consult their own tax advisors concerning the United
States federal, state and local and other tax consequences to them of the
purchase, ownership and disposition of our debt securities.

F. Dividends and Paying Agents

Not applicable.

G. Statement by Experts

Not applicable.

H. Documents on Display

We file periodic reports and other information with the SEC. You may read and
copy any document that we file with the SEC at the SEC's public reference room
at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549
and at the SEC's regional offices. Please call the SEC at 1-800-732-0330 for
further information on the operation of its public reference rooms. The SEC
also maintains a web site that contains reports, proxy and information
statements and other information regarding registrants that file electronically
with the SEC (http://www.sec.gov). You may also inspect our SEC reports and
other information at the New York Stock Exchange, Inc., 20 Broad Street, New
York, New York 10005. Some of this information may also be found on our website
at http://www.btm.co.jp.

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I. Subsidiary Information

Please refer to discussion under "Item 4.C. Information on the
Company--Organizational Structure."

Item 11. Quantitative and Qualitative Disclosures about Credit, Market and
Other Risk.

Our business is subject to a variety of risks, including credit risks, market
risks, liquidity risks, settlement risks, legal/regulation risks, operations
risks, information security risks and operational risks. The importance of
managing these risks has increased dramatically with financial deregulation and
globalization, and with advances made in information technology. Our
organizational structure has been designed to provide enhanced risk management
with the awareness that risk management is one of our critical functions and
our success depends upon the proper control and administration of risk.

Firm-Wide Risk Management

Our holding company, Mitsubishi Tokyo Financial Group, Inc., determines our
group-wide risk management policy at the holding company level, and we
implement the policy accordingly. Our holding company seeks to raise group-wide
risk awareness, integrate and improve the group's risk management framework,
allocate risk capital appropriately and eliminate specific concentrations of
risk.

Our policy for the control and administration of risk is based on the concept
of "Firm-Wide Risk Management." Our objective is to identify, quantify, monitor
and control risks, and to audit and inspect those activities. This in turn
helps us stabilize earnings in line with the risks of our business and properly
allocate management resources.

The Corporate Risk Management Office has overall responsibility for managing
and controlling all the risks on a firm-wide basis. Specific supervisory
divisions are responsible for each type of risk. Specifically, the Credit
Policy Office is responsible for credit risk. The Corporate Risk Management
Office is responsible for market risk and liquidity risk. The Operations
Services Planning Office is responsible for operations risk. The Information
Security Management Office is responsible for information security risk and the
Legal & Compliance Office is responsible for legal risk. These divisions all
work together to provide overall control and management of all of our risks on
a firm-wide basis.

The Corporate Risk Management Office controls and manages the risks arising
from various activities across product, operational and organizational lines.
The Risk Management Committee has overall responsibility for identifying and
controlling our risks. This committee meets semi-annually and on an
extraordinary basis if necessary. It formulates action plans and monitors
implementation in line with our basic risk management policies.

Capital Allocation System

We have a capital allocation system that limits the amount of capital allowed
to be placed at risk by each of our business units. The level of risk is then
controlled and managed within these limitations. The capital allocated by this
system is expected to cover all risks, including credit risk, market risk,
equity portfolio risk and operational risk. We provide for appropriate risk
management by ensuring that the levels of risk taken by our business units are
within our regulatory capital requirements. By optimizing capital allocation,
we aim to maximize our returns after deducting the cost of capital and to
enhance our risk-adjusted performance measurements.

Our capital allocation system allocates our economic capital, determined based
on potential losses, to each business unit by individual risk, determined on a
risk-by-risk basis in accordance with the estimated size of each risk. Using
this system, we seek to manage each risk by keeping it within the bounds of the
allocated economic capital. Our management strategy is to allocate economic
capital and maximize return and to confine our overall risk within the limits
of our equity capital.

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Credit Risk Management

Credit risk is the risk that we will be unable to collect the amount due to us
on the due date of a particular obligation as a result of the deterioration of
the borrower's financial condition. Credit risk is realized when a credit
instrument previously extended to a borrower loses part or all of its value.
This in turn exposes us to financial loss. We have established an internal
framework to maintain our asset quality, manage credit risk exposure and
achieve earnings commensurate with the risks undertaken by us.

We perform a detailed reviews of all borrowers' creditworthiness on a daily
basis timely after borrower's annual or semi-annual financial statements first
become available. In addition, as part of an ongoing credit review process, our
credit officers monitor changes in all customers' creditworthiness including
bankruptcy, past due principal or interest, downgrading of external credit
rating, declining stock price, business restructuring and other events and
reassesses borrowers' ratings timely in response to such events. Our credit
officers are also required to regularly report changes in the value of
collateral or guarantees of all borrowers.

Quantitative Analysis of Credit Risk

Using a highly complex model, we analyze our credit risk quantitatively. This
model measures credit risk based on historical data relating to credit amounts,
default rates and recovery rates and takes into account the correlation among
borrowers' default probabilities.

Portfolio Management

We work to achieve earnings commensurate with the risk levels undertaken by us.
Our strategy is to price our products based upon expected losses, as determined
in accordance with our internal credit rating system. At the same time, by
monitoring loan amounts and credit exposure by credit rating, type of business
and region, we seek to avoid a concentration of our credit risks in specific
categories. We have a specialized unit that sets credit ceilings by country to
address and manage country risk. We regularly review these credit ceilings and
adjust them when credit conditions change materially in any country.

Credit Risk Management System

We closely monitor and supervise our credit portfolio and manage credit risk on
a global consolidated basis. We seek to identify problem credits at an early
stage. We have in place a system of checks and balances in which a credit
administration section that is independent of the business development sections
screens individual transactions and manages the extension of credit.
Additionally, our management regularly holds investment and financial meetings
and credit and investment council meetings to review important matters related
to credit risk management.

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Credit Rating System

We use a credit rating system with a scale of 1 to 10 to evaluate credit risk,
as set out in the table below. Based on this system, we conduct a
self-assessment of our assets and a quantitative risk measurement of credit
risk, manage our loan portfolio and determine our pricing strategy. The credit
rating system, which is based on the concept of probabilities of default, is
consistent with both the method of evaluating credit risk under the new Basel
Capital Accord and those of third-party credit rating agencies. Our credit
rating system is also designed to conform to the regulatory authorities' risk
grading standards for classified loans. We constantly monitor changes in all of
our customers' creditworthiness and change ratings if necessary, so that we
perform accurate assessment of our own assets. With respect to country risk, we
assess each country using ten alphanumeric grades and determine a country risk
rating.

<TABLE>
<CAPTION>
                                         Credit rating
               -----------------------------------------------------------------
                  "1"- "7"           "8"              "9"             "10"
               --------------- ---------------- ---------------- ---------------
<S>            <C>             <C>              <C>              <C>
Borrower grade     Normal      Close Watch/(1)/ Likely to Become   Legally or
                                                 Bankrupt/(2)/      Virtually
                                                                  Bankrupt/(3)/
               (divided into 9 (divided into 3                   (divided into 2
                   ranks)           ranks)                           ranks)
</TABLE>
--------
(1) Borrowers classified as "Close Watch" require close scrutiny because their
    business performance is unstable or their financial condition is
    unfavorable. Borrowers ranked "8" correspond with "Needs Attention," of
    which some borrowers correspond with "Special Attention," a subcategory of
    "Needs Attention," under the Financial Services Agency's classification.
(2) Borrowers classified as "Likely to Become Bankrupt" are not yet bankrupt,
    but are in financial difficulty with poor progress in achieving their
    business restructuring plans or are likely to become bankrupt in the
    future. Borrowers ranked "9" correspond with "In Danger of Bankruptcy"
    under the Financial Service Agency's classification.
(3) Borrowers classified as "Legally or Virtually Bankrupt" are considered to
    be legally bankrupt or are virtually bankrupt. Borrowers ranked "10"
    correspond with "De Facto Bankrupt" or "Bankrupt" under the Financial
    Services Agency's classification.

Market Risk Management

Market risk is the risk that the value of our assets and liabilities could be
adversely affected by changes in market variables such as interest rates,
securities prices or foreign exchange rates.

Market Risk Management System

We use a three-tiered market risk management system to manage our market risk.
It divides authority and responsibility among the senior management level, the
line management level at trading divisions and offices and the trader level.
This system clearly establishes the authority and responsibility of each level.
The Corporate Risk Management Office has overall responsibility for our market
risk management, and is located in the Corporate Center, independent from our
individual business units. This office manages our market risk on a
consolidated basis, and also integrates middle office functions to ensure the
integrity, accuracy and transparency of market risk information.

Market Risk Management Process

On a semi-annual basis, our Executive Committee decides our overall market risk
limit and sets the limits for our foreign exchange, derivatives and other
businesses, considering various factors including our capital, earnings
capacity and trading capability. Authority for implementing the market risk
limit is given to each business unit's chief executive, who in turn delegates
this authority to the general managers in charge of each business line. In

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<PAGE>

order to keep losses within a predetermined limit, we have established a
stop-loss rule, which limits the amount of losses allowed from market
activities.

Our Market Risk Management Committee, which is comprised of our directors,
business unit chief executives and the general managers responsible for market
operations, meets on a weekly basis to review and discuss our market risk
profile and worldwide risk-taking activities. We also have a bank-wide Asset
and Liability Management Committee that includes Deputy Presidents, directors
and general managers responsible for strategic planning, market operations and
domestic and overseas customer relations. This committee meets once a month to
review and discuss our overall market risk profiles and asset and liability
management policies from a management perspective, and conveys its conclusions
to our business line managers for use in their daily operations.

The Corporate Risk Management Office uses a Market Risk Information System to
perform market risk management. Under this system, the Corporate Risk
Management Office reports daily to our senior management on our overall market
risk profile as well as by risk factors, by business unit and by region. It
also monitors compliance with the risk limits set by our Executive Committees
and our stop-loss rules.

In addition with respect to the operation of each of our business units, we
manage the risk leading to our assets and liabilities that expose us to market
risk, such as interest rate risk and exchange rate risk, by entering into
various hedging transactions using marketable securities and derivatives,
including futures, options and swaps. For a detailed discussion of the
financial instruments employed as part of our risk management strategy, see
note 22 to our consolidated financial statements.

Market Risk Measurement

We use our Market Risk Information System to measure our market risk, which
consists of general market risk and specific risk. General market risk, or VaR,
is the risk arising from changes in overall market price movement, while
specific risk refers to the risk of changes in the prices of individual
financial instruments owing to factors other than the general market risk.
Specific risk is further divided into Idiosyncratic Risk (VaI: the risk that
the price of a particular financial instrument moves idiosyncratically from the
overall market movement due to supply and demand or liquidity factors when no
particular credit event or event of default has occurred) and Event-default
Risk (VaE: the risk of price movement when a particular credit event or event
of default has occurred). Based on VaR and VaI, we delegate authority to manage
market risk to our business units. VaR, VaI and VaE are taken into account in
allocating capital to each business unit.

In order to measure VaR, our Market Risk Information System primarily employs a
variance-covariance matrix of approximately 650 risk factors with statistical
data from a three-year observation period. This methodology considers the
correlation among risk factors, while estimating non-linear option risks using
a scenario approach methodology.

Due to some limitations inherent in the use of the variance-covariance
approach, we have been studying an additional risk measurement methodology that
uses historical simulation. This methodology enables us to capture market
movements more accurately than a market risk measurement model based primarily
on a variance-covariance matrix In the future, we plan to replace
variance-covariance VaR with historical simulation VaR for all our units.

Our Market Risk Information System also supplements our VaR based risk
measurements by allowing us to analyze our market risk profile using
backtesting, stress tests and profit/loss simulations based on hypothetical
portfolios. These additional tests and simulations allow us to address some of
the limitations of our VaR calculation methodologies.

We use our Market Risk Information System at our major overseas offices,
enabling them to conduct comprehensive risk management on a stand-alone basis
and manage their market risks more effectively.

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<PAGE>

Capital Charges for Market Risk

The market risk regulations stipulated in the Basel Capital Accord, which were
implemented in Japan by guidelines adopted by the Financial Services Agency in
2000, require us to include the effects of market risk in calculating capital
adequacy ratios. We apply the "Internal Model Approach" to calculate our
general market risks and the "Standardized Approach" to calculate our specific
risks. In applying the Internal Model Approach, we are required to meet strict
qualitative and quantitative requirements, which our Market Risk Information
System has met as demonstrated by both internal and external examinations.

As defined in the market risk regulations, market risk is composed of interest
rate and equity price risks held in trading activities, foreign exchange risk
and commodity price risk. All references to VaR in the following illustrations
and explanations are based on a model using a variance-covariance matrix,
unless otherwise noted.

Illustrations of Market Risks for the Fiscal Year Ended March 31, 2004

Trading activities. For the fiscal year ended March 31, 2004, the average daily
VaR (holding period: one day; confidence level: 99%) for our trading activities
on a consolidated basis was (Yen)2.24 billion, slightly down from (Yen)2.30
billion in the fiscal year ended March 31, 2003. VaR decreased as a result of
ordinary operations according to market fluctuation.

The overall VaR of (Yen)2.24 billion was mainly comprised of an interest rate
risk of (Yen)1.38 billion followed by an equity risk of (Yen)0.53 billion and a
foreign exchange rate risk of (Yen)0.50 billion. Simple summation of VaR by
risk factor does not equate with the overall VaR, due to the diversification
effect within the portfolio.

VaR by each risk category at the end of the fiscal year ended March 31, 2004
was higher than that a year earlier. During the fiscal year ended March 31,
2004, the maximum VaR was (Yen)3.24 billion and the minimum was (Yen)1.50
billion. Average daily VaI (holding period: one day, confidence level: 99%) on
a consolidated basis was (Yen)0.56 billion with a maximum of (Yen)0.95 billion
and minimum of (Yen)0.39 billion.

VaR for Trading Activities (1 day--99%)
(April 2003--March 2004)

<TABLE>
<CAPTION>
                                 Daily                         March 31,   March 31,
Risk category                   average     High       Low       2004        2003
-------------                 ----------  --------- --------- ----------  ----------
                                                 (in billions yen)
<S>                           <C>         <C>       <C>       <C>         <C>
Interest rate................ (Yen) 1.38  (Yen)2.18 (Yen)0.94 (Yen) 1.44  (Yen) 1.00
   Japanese yen..............       0.75       1.36      0.28       0.99        0.37
   US dollars................       0.48       1.02      0.22       0.48        0.40
Foreign exchange rate........       0.50       1.01      0.30       1.01        1.00
Equity.......................       0.53       2.21      0.22       0.65        0.31
Commodity....................       0.14       0.29      0.02       0.21        0.08
Less Diversification effect..      (0.31)        --        --      (0.62)      (0.36)
                              ----------  --------- --------- ----------  ----------
       Overall Portfolio..... (Yen) 2.24  (Yen)3.24 (Yen)1.50 (Yen) 2.69  (Yen) 2.12
                              ==========  ========= ========= ==========  ==========
</TABLE>
--------
Note: The high and low for each risk category occurred on different days.

                                      117

<PAGE>

The daily average VaR by quarter in the fiscal year ended March 31, 2004 was as
follows:

<TABLE>
<CAPTION>
                                                 Daily
                    Quarter                   average VaR
                    -------                -----------------
                    <S>                    <C>
                    April--June 2003...... (Yen)2.01 billion
                    July--September 2003.. (Yen)2.39 billion
                    October--December 2003 (Yen)2.30 billion
                    January--March 2004... (Yen)2.25 billion
</TABLE>

In our market risk management, we evaluate whether our trading activities
generate sufficient returns in relation to our overall market risk profile.
Although market conditions were often volatile during the fiscal year ended
March 31, 2004, our trading-related revenue was relatively stable with positive
trading-related revenue recorded for 209 of 261 trading days during this
period. Furthermore, the amount of trading-related revenue per day remained
within a stable range, with 40 days of positive revenue and 2 days of negative
revenue exceeding (Yen)1 billion.

Backtesting. We conduct backtesting to verify the reasonableness of VaR
calculated through our internal models, comparing daily reported VaR with
actual daily gains or losses (realized gains/losses plus increase/decrease in
unrealized gains).

In the fiscal year ended March 31, 2004, actual gains/losses did not exceed VaR
on any trading day. This means that our VaR model provided reasonably accurate
measurements during the fiscal year ended March 31, 2004.

Non-trading activities. VaR (holding period: one day; confidence level: 99%)
for our total non-trading activities as of March 31, 2004, excluding market
risks related to strategic equity investment, measured using the same standard
used for our trading activities, was (Yen)24.7 billion. Mainly as a result of a
increase in interest rate positions in Japanese yen, the VaR was (Yen)11.0
billion higher than that as of the fiscal year ended March 31, 2003.

During the fiscal year ended March 31, 2004, the maximum VaR was (Yen)29.7
billion and the minimum VaR was (Yen)14.4 billion for our non-trading
activities. Daily average VaI (holding period: one day; confidence level: 99%)
on a consolidated basis was (Yen)1.1 billion with a maximum of (Yen)1.4 billion
and a minimum of (Yen)0.8 billion.

For our non-trading activities, 96% of the market risk stems from interest rate
risk. (We do not include our strategic investments in equity in our non-trading
activities. Risks related to these strategic investments are discussed below.)

In the fiscal year ended March 31, 2004, the interest rate average daily VaR
for our non-trading activities was (Yen)19.0 billion, which represents a
(Yen)6.2 billion increase from the 2002 fiscal year's average daily VaR of
(Yen)12.8 billion. The main cause of the increase was attributable to a
increase of positions in interest rate of Japanese yen. Interest rate average
daily VaR by quarter in the fiscal year ended March 31, 2004 was as follows:

<TABLE>
<CAPTION>
                                                 Daily
                    Quarter                   average VaR
                    -------                -----------------
                    <S>                    <C>
                    April--June 2003...... (Yen)14.3 billion
                    July--September 2003.. (Yen)21.6 billion
                    October--December 2003 (Yen)19.3 billion
                    January--March 2004... (Yen)20.9 billion
</TABLE>

Compared to the fiscal year ended March 31, 2003, the percentage of interest
rate risk for Japanese yen increased significantly from 37.0% to 61.9%, while
those for US dollars and euros decreased respectively from 42.7% to 27.5% and
from 19.7% to 10.3%.

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<PAGE>

Stress testing. Market risk measures, including VaR and VaI, reflect risk
amounts measured, assuming "normal conditions," based on empirical market
fluctuations. While VaR and VaI estimate the possible maximum potential risk of
loss on normal market movements, market movements could deviate from historical
patterns. Since it is important to be prepared for unusual market movements, we
also use our Market Risk Information System to perform stress testing based on
various market scenarios. We use this process to analyze and understand where
risks exist for us and what effect they could have on our earnings.

In addition, the Corporate Risk Management Office conducts stress testing by
incorporating individual scenarios based on market conditions. It is possible
to analyze our overall position from a variety of angles by incorporating
scenarios for our front offices that actually conduct transactions into the
Market Risk Information System. The adoption of this approach has further
strengthened communication between our front offices and the Corporate Risk
Management Office.

Risk Management of Strategic Equity Portfolio

We hold shares of various corporate clients for strategic purposes, in
particular to maintain long-term relationships with these clients. These
investments have the potential to increase business revenue and appreciate in
value. At the same time, we are exposed to the risk of price fluctuation in the
Japanese stock market.

In recent years, it has been a high priority for us to reduce our equity
portfolio in order not only to limit the risks associated with holding a large
equity portfolio, but also to comply with a new regulatory framework that
prohibits Japanese banks from holding an amount of shares in excess of their
adjusted Tier I capital after September 2006. As of March 2004, we reduced and
have continued to maintain the amount of our equity holdings below our adjusted
Tier I capital enabling us to comply with the new regulatory framework in
advance of the deadline. As part of this process we reduced the amount of our
equity holdings in two fiscal years by over (Yen)1.5 trillion, partly by
transferring equity securities to exchange traded funds.

As part of our risk management activities, we analyze the price fluctuation
risk of our equity portfolio using a simulation that estimates market risk by
monitoring changes in the Tokyo Stock Price Index, or TOPIX. The TOPIX is a
composite index of all common stocks listed on the First Section of the Tokyo
Stock Exchange.

Our simulations indicated that each one point change in the TOPIX would have
had an impact on the value of our equity portfolio of approximately (Yen)2.6
billion as of March 31, 2004 and approximately 2.8 billion as of March 30,
2003. These simulations analyze data for our entire equity portfolio.
Therefore, it is important to note that the actual results may differ from our
expectations because of the price fluctuations of individual holdings.

In addition, we monitor our equity portfolio closely and regularly evaluate the
profitability of these strategic holdings based on our capital and overall
returns from these investments.

Other Risk Management

Liquidity Risk Management

Our financing capabilities are supported by a funding network based on the
expansion of our domestic and overseas branches and customer base. We benefit
from having one of the highest credit ratings among major Japanese banks. While
we have established strong liquidity, we maintain liquidity risk
countermeasures at all levels of our organization. These countermeasures
include the oversight of yen and foreign currency risk, covering everything
from daily management to emergency measures, as well as reporting to and
deliberations within the Asset and Liability Management Committee. We manage
all aspects of the daily funding mechanism. We also manage our funding sources
using liquidity risk indices, such as liquidity gap, liquidity supplying
products, such as commitment lines, and buffer assets. Furthermore, we have
contingency plans for our entire institution to respond swiftly to sudden
changes in the market, political or economic environments. To maintain

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<PAGE>

proper checks and balances, the Corporate Risk Management Office also monitors
liquidity risk and reports it independently to senior management along with
product liquidity.

Settlement Risk Management

Although risk is inherent in the fundamental banking function of settlement,
banks generally have not been as aware of settlement risk as they have of other
forms of risk because there have been relatively few cases where problems have
arisen as a result of it. By its nature, settlement risk is identical with
credit risk, liquidity risk and operations risk, and corporate level control is
necessary for these risks. We view our settlement business as a strategic area
that highlights our creditworthiness, funding capabilities and networking
strengths, and we are working on reinforcing the settlement risk management
systems on which these depend.

Foreign exchange settlement risk arises primarily from the difference of the
time zones in which each part of the exchange is settled. The ongoing
globalization and liberalization of the world's financial markets have resulted
in a dramatic increase in the volume of foreign exchange. We are strengthening
our management of foreign exchange settlement risk by establishing a framework
that encompasses such risks as credit risk. In September 2002, a special
purpose bank, the Continuous Linked Settlement Bank, or CLS Bank, was launched.
We have been one of the core financial institutions who have been deeply
involved in the development of continuous linked settlement. Our participation
in CLS Bank settlement has reduced our foreign exchange settlement risk.

Legal/Regulatory Risk Management

To control legal risks, our internal procedures explicitly state important laws
and regulations to be observed in our operations. We also have a system to
obtain the opinions of legal specialists as needed. The Legal & Compliance
Office manages our legal risk by studying and researching legal issues,
formulating internal guidance, dealing with intellectual property-related
issues, handling lawsuits and controlling and managing external lawyers.

Operations Risk Management

Operations risk is defined as the risk of incurring losses that might be caused
by negligence of proper operational processing, or by incidents or misconduct
by either officers or staffs. Operations Services Planning Office manages
operations risk by having any operational incidents reported, analyzing causes
and formulating preventive measures. We also have maintained an operational
incidents database and developed advanced quantification techniques using the
database that enable us to better evaluate and control operations risk. By
securing the accuracy of our operations and providing more customer-oriented
services, we try to maximize customer satisfaction on our operations every day.

Information Security Risk Management

Information security risk is the risk of incurring tangible or intangible
losses as a result of:

..  computer systems failure or malfunction impairing a bank's ability to carry
   out its business and to provide customer services,

..  business operations being interrupted, or information being stolen,
   falsified or otherwise corrupted following unauthorized entry into a bank's
   computer systems, or

..  information leakage due to any reason such as mishandling, malicious
   conduct, etc.

To try to ensure that our systems operate reliably at all times, when
developing information systems, we perform tests designed to prevent problems,
and we have also implemented programs to rectify problems before they become
more serious. In addition, we have established disaster response systems,
prepared backups for all our infrastructural systems and run damage limitation
drills. The rapid development of information and communications technologies
has brought a growing need for information protection. We attempt to prevent
unauthorized entry to our systems and reduce information security risk by
making our information management and security procedures more rigorous. The
Information Security Management Committee meets semi-annually to discuss the
management of information security risk.

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<PAGE>

Operational Risk Management

We define operational risk as the risk of loss resulting from inadequate or
failed internal processes, people and systems, or from external events. This
definition includes legal, strategic and reputational risk.

During fiscal year 1999, we introduced a framework of self-assessment to enable
each business unit to identify and measure its own operational risk, and to
plan and implement its own risk management measures. The Corporate Risk
Management Office formulates the policy and standards for the framework. Under
the framework, we define several dozen operational risk categories and explore
scenarios for each risk category, which would seriously affect our business and
operations. Each business unit estimates the likely size and frequency of
losses related to defined scenarios and scores its risk exposure for each risk
category, based on the effectiveness of its risk management measures. The
corporate center office that has overall responsibility for a risk category
verifies the assessment conducted by each business unit, including risk scores
for such risk category. The Audit & Credit Examination Office also inspects the
assessment conducted by each business unit and verified by the applicable
corporate center offices. Our overall operational risk is quantified by
multiplying the risk scores by the applicable yen amount.

To comply with the forthcoming new Basel Capital Accord, which requires a bank
to charge capital for its operational risk, and enhance our operational risk
management, we have been collecting, classifying, and recording internal loss
data since 2000.

Compliance

We consider compliance to be one of the most important considerations in
conducting our business. As such, we regularly review our compliance systems
and seek enhancements throughout our organization.

In February 1998, we established a compliance system to ensure that the
importance given to compliance issues by our management is thoroughly
propagated throughout us. Important compliance issues are decided by the
Compliance Committee, which undertakes hearings and discussions once every
three months concerning reports on our compliance system and its status
worldwide. In the event of a significant violation of law, the Compliance
Committee takes steps to rectify the matter and issues recommendations.

The Compliance Office, as an inner office of the Legal & Compliance Office,
acts as the secretariat for the Compliance Committee and coordinates compliance
issues throughout us. It is responsible for maintaining and updating our
compliance manual and other codes or rules determined by our corporate
principles, our
internal regulations and all applicable laws and regulations. All of our
employees are made familiar with the manual through internal training programs.

We consult with external experts, such as in lawyers and accountants, through
periodical meetings on the comprehensiveness and effectiveness of our
compliance system.

In May 2002, we adopted Mitsubishi Tokyo Financial Group, Inc.'s code of ethics
as the guiding principles for our basic corporate and ethical values.

Compliance Systems at Divisions, Offices and Branches

We have appointed compliance officers/liaison officers to lead the drive for
compliance in every division, office and branch in and outside Japan. These
officers hold training sessions in their own branches, and implement quarterly
checks on compliance using compliance checklists, submitting their reports to
the Compliance Office. Implementation is ensured by later checks by the Audit &
Credit Examination Office. Each such officer also draws up a practical
compliance program to investigate compliance requirement, assess compliance
risk and oversee compliance performances. The compliance program is also
submitted to the Compliance Office in order

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<PAGE>

to monitor it. The compliance officers are also in charge of reporting
individual compliance issues to and seeking advice from the Compliance Office.

Each division monitors changes in the law that affect that division's work, and
checks documents to ensure that there are no conflicts with our role as a
public institution or with our role in society. For its part, the Compliance
Office seeks to ensure rigorous bank-wide compliance by responding to requests
for legality checks of important matters affecting our management and by
maintaining an ongoing dialogue with the divisions on individual issues.

All of our affiliates within Japan have their own compliance systems for their
particular lines of business. For our overseas affiliates, compliance is
managed as part of our own compliance system.

Anti-Money Laundering and Terrorist Financing

We recognize that one of our important missions is to prevent the use of our
operations for criminal purposes, including money laundering or terrorist
financing.

Internal Audit

Our Audit Office engages in an internal audit contributing to maintaining the
soundness of our business operations. It provides advice and recommendations on
issues, by independently examining and evaluating the appropriateness and
effectiveness of our organization's internal control systems, as well as our
operational policies and procedures. Internal audits are performed in all
business units, which include both domestic and foreign branches, head offices
and subsidiaries. The Audit Office is an independent group, and no limitation
is placed upon it by other divisions or units.

After consideration of the types and degree of risks in the organization, as
well as its management of such risks, the Audit Office formulates medium-term
and fiscal-year Audit Plans, which are approved by our board of directors on an
annual basis.

Item 12. Description of Securities Other Than Equity Securities.

Not applicable.

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<PAGE>

                                    PART II

Item 13. Defaults, Dividend Arrearages and Delinquencies.

None.

Item 14. Material Modifications of the Rights of Security Holders and Use of
Proceeds.

None.

Item 15. Controls and Procedures.

An evaluation was carried out under the supervision and with the participation
of our management, including the Chief Executive Officer, or CEO, and Chief
Financial Officer, or CFO, of the effectiveness of our disclosure controls and
procedures as of the end of the period covered by this Annual Report. Based on
such evaluation, the CEO and CFO have concluded that our disclosure controls
and procedures are effective to ensure that information required to be
disclosed by us in reports that we file or submit under the U.S. Securities
Exchange Act of 1934 is recorded, processed, summarized and reported within the
time periods specified in SEC rules and forms. During the period covered by
this Annual Report, there were no significant changes in our internal controls
or in other factors that could materially affect, or is reasonably likely to
materially affect, the disclosure controls, including any corrective actions
with regard to significant deficiencies and material weaknesses.

Item 16A. Audit Committee Financial Expert.

Our board of corporate auditors has determined that Mr. Yutaka Hasegawa is an
"audit committee financial expert" as defined in Item 16A. of Form 20-F. Mr.
Hasegawa has served as General Manager of North American Headquarters, General
Manager of New York Branch and CEO of a Californian subsidiary of the
Mitsubishi Bank for eight years. He has also served as Corporate Auditor and
CEO of our consulting business subsidiary for six years. In those roles, he
supervised and coordinated the preparation of financial statements and various
financial reports filed with U.S. governmental authorities.

Item 16B. Code of Ethics.

We have adopted the code of ethics of Mitsubishi Tokyo Financial Group, Inc.,
or the MTFG code of ethics, as the guiding principles for our basic corporate
and ethical values. In addition we have adopted, compliance rules, a compliance
manual and employee work rules. Each of the MTFG code of ethics and our
compliance rules, compliance manual and employee work rules applies to our
principal executive officer, principal financial officer, principal accounting
officer and persons performing similar functions.

Our compliance rules set forth the necessity of adherence to the MTFG code of
ethics by our directors, executive officers and employees. These rules also set
forth the roles and responsibilities of our employees, compliance officers,
Legal & Compliance Office and others in the event of a breach of the compliance
rules.

Our compliance manual was created to identify, and to promote compliance by our
directors, executive officers and employees with, the relevant laws and
regulations in conjunction with the MTFG code of ethics, our compliance rules
and our employee work rules. This manual also sets forth the procedures
regarding the handling of conflicts of interest for our directors and the
promotion of conduct that meets the MTFG code of ethics and our compliance
rules for employees.

Our employee work rules set forth, among other things, the consequences of our
employees' noncompliance with the relevant laws and regulations.

A copy of the sections of the MTFG code of ethics, our compliance rules, our
compliance manual and our employee work rules relating to the "code of ethics"
(as defined in paragraph (b) of Item 16B. of Form 20-F) is attached as Exhibit
11 to this Annual Report. No amendments to those sections of the MTFG code of
ethics, our compliance rules and our compliance manual have been made, and no
waivers of the code of ethics, compliance

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<PAGE>

rules and compliance manual have been granted to our principal executive
officer, principal financial officer, principal accounting officer, directors
and corporate auditors, during the fiscal year ending March 31, 2004.

Item 16C. Principal Accountant Fees and Services.

Fees and Services of Deloitte Touche Tohmatsu

The aggregate fees billed by Deloitte Touche Tohmatsu, our independent auditor,
for the fiscal years ended March 31, 2003 and 2004 are presented in the
following table. None of the services billed for the fiscal year ended March
31, 2003 was subject to pre-approval requirements. For the fiscal year ended
March 31, 2004, all services subject to pre-approval, which were entered into
after May 6, 2003, were pre-approved either by the board of corporate auditors
of our holding company, Mitsubishi Tokyo Financial Group, Inc. or its full-time
corporate auditor:

<TABLE>
<CAPTION>
                                          2003       2004
                                       ---------- ----------
                                           (in millions)
                    <S>                <C>        <C>
                    Audit fees........ (Yen)1,142 (Yen)1,147
                    Audit-related fees         54         90
                    Tax fees..........        145         96
                    All other fees....        732        116
                                       ---------- ----------
                       Total.......... (Yen)2,073 (Yen)1,449
                                       ========== ==========
</TABLE>

The description of our fees billed for each categories listed above is as
follows:

Audit fees--Audit fees are primarily for annual audit of our financial
statements, review of our semi-annual condensed financial statements, statutory
audit of our financial statements and audits of our subsidiary financial
statements. Audit fees also include comfort letters related to our debt
financing activities.

Audit-related fees--Audit-related fees primarily include due diligence
services, accounting consultations, agreed upon procedures on internal controls
and employee benefit plan audits.

Tax fees--Tax fees relate primarily to tax compliance including preparation of
tax return filings, tax advisory and tax planning services.

All other fees--All other fees primarily include agreed upon procedures related
to our bulk sales of loans or securitizations and operational audits of our
overseas branches.

Pre-Approval Policies and Procedures for Services by Deloitte Touche Tohmatsu

The board of corporate auditors of our holding company, Mitsubishi Tokyo
Financial Group, Inc. performs the pre-approval function required by applicable
SEC rules and regulations. Effective May 1, 2003, the board of corporate
auditors of Mitsubishi Tokyo Financial Group, Inc. has established pre-approval
policies and procedures that we and our subsidiaries must follow before
engaging Deloitte Touche Tohmatsu to perform audit and permitted non-audit
services.

When we or any of our subsidiaries intends to engage Deloitte Touche Tohmatsu
to perform audit and permitted non-audit services, it must make an application
for pre-approval on either a periodic or case-by-case basis.

..   Periodic Application is an application for pre-approval made each year for
    services that are expected to be provided by Deloitte Touche Tohmatsu
    during the next fiscal year.

..   Case-by-case application is an application for pre-approval made on a
    case-by-case basis for services provided by Deloitte Touche Tohmatsu that
    are not otherwise covered by the relevant periodic application.

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Pre-approval is resolved in principle by the board of corporate auditors prior
to engagement, although if necessary a full-time corporate auditor of
Mitsubishi Tokyo Financial Group, Inc., or a full-time corporate auditor, may
consider any case-by-case application for pre-approval on behalf of the board
of corporate auditors prior to the next scheduled board meeting. Such decisions
made individually by a full-time corporate auditor are reported to and ratified
by the board of corporate auditors at the next scheduled board meeting.

                                      125

<PAGE>

                                   PART III

Item 17. Financial Statements.

In lieu of responding to this item, we have responded to Item 18 of this Annual
Report.

Item 18. Financial Statements.

The information required by this item is set forth in our consolidated
financial statements starting on page F-1 of this Annual Report.

Item 19. Exhibits.

<TABLE>
<CAPTION>
Exhibit                                              Description
-------                                              -----------
<C>     <S>
   1(a) Articles of Incorporation of The Bank of Tokyo-Mitsubishi, Ltd., as amended and restated on June 28,
          2004. (English Translation)/(1)/

   1(b) Regulations on Corporation Meetings of The Bank of Tokyo-Mitsubishi, Ltd., as amended on
          May 24, 2002. (Original in Japanese with English Translation)/(3)/

   1(c) Regulations of the Board of Directors of The Bank of Tokyo-Mitsubishi, Ltd., as amended on
          May 24, 2002. (Original in Japanese with English Translation)/(3)/

   1(d) Regulations on the Handling of Shares of The Bank of Tokyo-Mitsubishi, Ltd., as amended and
          restated on June 26, 2003. (English Translation)/(2)/

   2(a) Indenture dated as of February 25, 2000 between The Bank of Tokyo-Mitsubishi, Ltd. and The Chase
          Manhattan Bank./(4)/

   8    Subsidiaries of the Company--see "Item 4.C. Information on the Company--Organizational
          Structure."

  11    Code of ethics of Mitsubishi Tokyo Financial Group, Inc. and compliance rules, compliance manual
          and employee work rules of The Bank of Tokyo-Mitsubishi., Ltd. applicable to its directors and
          managing officers, including its principal executive officer, principal financial officer, principal
          accounting officer or controller, or persons performing similar functions. (English translation of
          relevant sections)/(1)/

  12    Certifications required by Rule 13a-14(a) (17 CFR 240.13a-14(a)) or Rule 15d-14(a) (17 CFR
          240.15d-14(a))./(1)/

  13    Certifications required by Rule 13a-14(b) (17 CFR 240.13a-14(b)) or Rule 15d-14(b) (17 CFR
          240.15d-14(b)) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C.
          1350)./(1)/
</TABLE>
--------
(1) Filed herewith.
(2) Incorporated by reference from the Annual Report on Form 20-F filed on
    September 29, 2003.
(3) Incorporated by reference from the Annual Report on Form 20-F filed on
    August 30, 2002.
(4) Incorporated by reference from the Annual Report on Form 20 F filed on
    August 17, 2001.

                                      126

<PAGE>

                           SELECTED STATISTICAL DATA

Due to close integration of foreign and domestic activities, it is difficult to
make a precise determination of assets, liabilities, income and expenses of our
foreign operations. The foreign operations as presented include the business
conducted by overseas subsidiaries and branches, and the international business
conducted by the several international banking related divisions headquartered
in Japan. Our management believes that the results appropriately represent our
domestic and foreign activities.

During the fiscal year ended March 31, 2003, the Bank of Japan changed the
industry segment loan classification. Such change primarily includes an
introduction of a new "Communication and information services" category. Due to
the introduction of the new category, certain businesses previously included in
"Manufacturing," "Services" and "Other" industries were reclassified into
"Communication and information services." This change is expected to provide a
more transparent and detailed description of the loan portfolio. In response to
the change, we modified the loan reporting system. For comparative purposes, we
provide the information by industry segment as of March 31, 2003 and 2004,
including III. Loan Portfolio and IV. Summary of Loan Loss Experience, based on
both the old and new industry segment classifications.

In the fiscal year ended March 31, 2004, certain operations including domestic
mortgage securities business were discontinued and certain figures in prior
fiscal years were reclassified to discontinued operations to conform to the
presentation for the fiscal year ended March 31, 2004.

                                      A-1

<PAGE>

I. Distribution of Assets, Liabilities and Shareholder's Equity; Interest Rates
and Interest Differential

Average Balance Sheets, Interest and Average Rates

The following table shows our average balances, interest and average interest
rates for the fiscal years ended March 31, 2002, 2003 and 2004. Average
balances are generally based on a daily average while a month-end average is
used for certain average balances when it is not practicable to obtain
applicable daily averages. The average balances determined by such methods are
considered to be representative of our operations.

<TABLE>
<CAPTION>
                                                                                Fiscal years ended March 31,
                                   -------------------------------------------------------------------------------
                                                    2002                                    2003
                                   --------------------------------------  --------------------------------------
                                       Average                     Average     Average                     Average
                                       balance         Interest     rate       balance         Interest     rate
                                   ---------------  -------------- ------- ---------------  -------------- -------
                                                                              (in millions, except percentages)
<S>                                <C>              <C>            <C>     <C>              <C>            <C>
Assets:
Interest-earning assets:
  Interest-earning deposits in
   other banks:
   Domestic....................... (Yen)   481,089  (Yen)   10,672  2.22%  (Yen)   354,260  (Yen)    3,650  1.03%
   Foreign........................       4,569,042         141,851  3.10         2,960,108          63,329  2.14
                                   ---------------  --------------         ---------------  --------------
    Total.........................       5,050,131         152,523  3.02         3,314,368          66,979  2.02
                                   ---------------  --------------         ---------------  --------------
  Call loans, funds sold, and
   receivables under resale
   agreements and securities
   borrowing transactions:
   Domestic.......................       1,960,502           7,922  0.40         1,236,875           4,441  0.36
   Foreign........................       2,178,930         132,620  6.09         1,547,905          38,335  2.48
                                   ---------------  --------------         ---------------  --------------
    Total.........................       4,139,432         140,542  3.40         2,784,780          42,776  1.54
                                   ---------------  --------------         ---------------  --------------
  Trading account assets:
   Domestic.......................       2,842,158          10,455  0.37         3,533,200          10,056  0.28
   Foreign........................         679,223           2,022  0.30           522,781           1,159  0.22
                                   ---------------  --------------         ---------------  --------------
    Total.........................       3,521,381          12,477  0.35         4,055,981          11,215  0.28
                                   ---------------  --------------         ---------------  --------------
  Investment securities (see Note
   1):
   Domestic.......................      11,865,317          79,882  0.67        13,762,282          80,138  0.58
   Foreign........................       3,890,145         169,016  4.34         3,783,498         142,757  3.77
                                   ---------------  --------------         ---------------  --------------
    Total.........................      15,755,462         248,898  1.58        17,545,780         222,895  1.27
                                   ---------------  --------------         ---------------  --------------
  Loans (see Note 2):
   Domestic.......................      29,363,046         552,122  1.88        30,756,720         502,010  1.63
   Foreign........................       9,998,889         561,489  5.62         9,872,489         414,792  4.20
                                   ---------------  --------------         ---------------  --------------
    Total.........................      39,361,935       1,113,611  2.83        40,629,209         916,802  2.26
                                   ---------------  --------------         ---------------  --------------
  Total interest-earning assets:
   Domestic.......................      46,512,112         661,053  1.42        49,643,337         600,295  1.21
   Foreign........................      21,316,229       1,006,998  4.72        18,686,781         660,372  3.53
                                   ---------------  --------------         ---------------  --------------
    Total.........................      67,828,341       1,668,051  2.46        68,330,118       1,260,667  1.84
                                   ---------------  --------------         ---------------  --------------
  Non-interest-earning assets:
   Cash and due from banks........       1,330,614                               1,826,588
   Other non-interest-earning
    assets........................       6,512,524                               7,731,834
   Allowance for credit
    losses........................      (1,328,187)                             (1,326,654)
                                   ---------------                         ---------------
    Total non-interest-earning
     assets.......................       6,514,951                               8,231,768
                                   ---------------                         ---------------
  Total assets from
   discontinued operations........         119,603                                  80,280
                                   ---------------                         ---------------
  Total average assets............ (Yen)74,462,895                         (Yen)76,642,166
                                   ===============                         ===============
</TABLE>
<TABLE>
<CAPTION>

                                   ---------------------------------------
                                                    2004
                                   --------------------------------------
                                       Average                     Average
                                       balance         Interest     rate
                                   ---------------  -------------- -------

<S>                                <C>              <C>            <C>
Assets:
Interest-earning assets:
  Interest-earning deposits in
   other banks:
   Domestic....................... (Yen)   299,310  (Yen)    3,942  1.32%
   Foreign........................       2,378,858          39,528  1.66
                                   ---------------  --------------
    Total.........................       2,678,168          43,470  1.62
                                   ---------------  --------------
  Call loans, funds sold, and
   receivables under resale
   agreements and securities
   borrowing transactions:
   Domestic.......................       2,718,805           3,327  0.12
   Foreign........................       1,516,144          25,760  1.70
                                   ---------------  --------------
    Total.........................       4,234,949          29,087  0.69
                                   ---------------  --------------
  Trading account assets:
   Domestic.......................       5,223,713          22,740  0.44
   Foreign........................         541,584           5,275  0.97
                                   ---------------  --------------
    Total.........................       5,765,297          28,015  0.49
                                   ---------------  --------------
  Investment securities (see Note
   1):
   Domestic.......................      15,295,168          77,352  0.51
   Foreign........................       4,175,301         132,227  3.17
                                   ---------------  --------------
    Total.........................      19,470,469         209,579  1.08
                                   ---------------  --------------
  Loans (see Note 2):
   Domestic.......................      31,393,691         478,921  1.53
   Foreign........................       9,048,810         331,080  3.66
                                   ---------------  --------------
    Total.........................      40,442,501         810,001  2.00
                                   ---------------  --------------
  Total interest-earning assets:
   Domestic.......................      54,930,687         586,282  1.07
   Foreign........................      17,660,697         533,870  3.02
                                   ---------------  --------------
    Total.........................      72,591,384       1,120,152  1.54
                                   ---------------  --------------
  Non-interest-earning assets:
   Cash and due from banks........       4,063,489
   Other non-interest-earning
    assets........................       7,720,556
   Allowance for credit
    losses........................        (922,278)
                                   ---------------
    Total non-interest-earning
     assets.......................      10,861,767
                                   ---------------
  Total assets from
   discontinued operations........          21,183
                                   ---------------
  Total average assets............ (Yen)83,474,334
                                   ===============
</TABLE>
--------
Notes:
1. Tax-exempt income of tax-exempt investment securities has not been
   calculated on a tax equivalent basis because the effect of such calculation
   would not be material.
2. Average balances on loans outstanding include all nonaccrual and
   restructured loans. See "III. Loan Portfolio." The amortized portion of net
   loan origination fees (costs) is included in interest income on loans,
   representing an adjustment to the yields with insignificant impact.

                                      A-2

<PAGE>

<TABLE>
<CAPTION>
                                                                                Fiscal years ended March 31,
                                       -----------------------------------------------------------------------------------------
                                                       2002                                 2003
                                       -----------------------------------  -----------------------------------  ---------------
                                           Average                  Average     Average                  Average     Average
                                           balance       Interest    rate       balance       Interest    rate       balance
                                       --------------- ------------ ------- --------------- ------------ ------- ---------------
                                                                             (in millions, except percentages)
<S>                                    <C>             <C>          <C>     <C>             <C>          <C>     <C>
Liabilities and shareholder's equity:
Interest-bearing liabilities:
  Deposits:
   Domestic........................... (Yen)34,540,984 (Yen)101,951  0.30%  (Yen)39,576,034 (Yen) 54,991  0.14%  (Yen)41,854,724
   Foreign............................       9,717,893      286,722  2.95         8,000,966      138,603  1.73         8,171,037
                                       --------------- ------------         --------------- ------------         ---------------
    Total.............................      44,258,877      388,673  0.88        47,577,000      193,594  0.41        50,025,761
                                       --------------- ------------         --------------- ------------         ---------------
  Debentures--Domestic................       2,937,467       20,596  0.70         1,346,268        8,508  0.63           498,518
                                       --------------- ------------         --------------- ------------         ---------------
  Call money, funds purchased, and
   payables under repurchase
   agreements and securities lending
   transactions:
   Domestic...........................       5,058,574       20,056  0.40         4,094,246        3,478  0.08         5,433,533
   Foreign............................       2,732,554      145,248  5.32         2,251,946       66,852  2.97         2,125,712
                                       --------------- ------------         --------------- ------------         ---------------
    Total.............................       7,791,128      165,304  2.12         6,346,192       70,330  1.11         7,559,245
                                       --------------- ------------         --------------- ------------         ---------------
  Other short-term borrowings and
   trading account liabilities:
   Domestic...........................       1,550,916       14,744  0.95         1,609,391       12,960  0.81         3,575,821
   Foreign............................         958,578       29,218  3.05           598,545       16,493  2.76           537,476
                                       --------------- ------------         --------------- ------------         ---------------
    Total.............................       2,509,494       43,962  1.75         2,207,936       29,453  1.33         4,113,297
                                       --------------- ------------         --------------- ------------         ---------------
  Long-term debt:
   Domestic...........................       2,891,473       88,460  3.06         3,474,694       88,610  2.55         3,904,370
   Foreign............................       1,774,722       75,321  4.24         1,434,889       44,588  3.11         1,040,102
                                       --------------- ------------         --------------- ------------         ---------------
    Total.............................       4,666,195      163,781  3.51         4,909,583      133,198  2.71         4,944,472
                                       --------------- ------------         --------------- ------------         ---------------
  Total interest-bearing liabilities:
   Domestic...........................      46,979,414      245,807  0.52        50,100,633      168,547  0.34        55,266,966
   Foreign............................      15,183,747      536,509  3.53        12,286,346      266,536  2.17        11,874,327
                                       --------------- ------------         --------------- ------------         ---------------
    Total.............................      62,163,161      782,316  1.26        62,386,979      435,083  0.70        67,141,293
                                       --------------- ------------         --------------- ------------         ---------------
Non-interest-bearing liabilities......       9,982,389                           12,438,992                           13,919,070
                                       ---------------                      ---------------                      ---------------
Total liabilities from discontinued
 operations...........................          67,169                               50,991                               15,155
                                       ---------------                      ---------------                      ---------------
Shareholder's equity..................       2,250,176                            1,765,204                            2,398,816
                                       ---------------                      ---------------                      ---------------
Total average liabilities and
 shareholder's equity................. (Yen)74,462,895                      (Yen)76,642,166                      (Yen)83,474,334
                                       ===============                      ===============                      ===============
Net interest income and average
 interest rate spread.................                 (Yen)885,735  1.20%                  (Yen)825,584  1.14%
                                                       ============  ====                   ============  ====
Net interest income as a percentage
 of average total interest-earning
 assets...............................                               1.31%                                1.21%
                                                                     ====                                 ====
</TABLE>
<TABLE>
<CAPTION>

                                       --------------------
                                        2004
                                       --------------------
                                                    Average
                                         Interest    rate
                                       ------------ -------

<S>                                    <C>          <C>
Liabilities and shareholder's equity:
Interest-bearing liabilities:
  Deposits:
   Domestic........................... (Yen) 40,212  0.10%
   Foreign............................      104,238  1.28
                                       ------------
    Total.............................      144,450  0.29
                                       ------------
  Debentures--Domestic................        4,035  0.81
                                       ------------
  Call money, funds purchased, and
   payables under repurchase
   agreements and securities lending
   transactions:
   Domestic...........................       10,852  0.20
   Foreign............................       37,320  1.76
                                       ------------
    Total.............................       48,172  0.64
                                       ------------
  Other short-term borrowings and
   trading account liabilities:
   Domestic...........................       26,097  0.73
   Foreign............................        6,868  1.28
                                       ------------
    Total.............................       32,965  0.80
                                       ------------
  Long-term debt:
   Domestic...........................       85,291  2.18
   Foreign............................       23,983  2.31
                                       ------------
    Total.............................      109,274  2.21
                                       ------------
  Total interest-bearing liabilities:
   Domestic...........................      166,487  0.30
   Foreign............................      172,409  1.45
                                       ------------
    Total.............................      338,896  0.50
                                       ------------
Non-interest-bearing liabilities......

Total liabilities from discontinued
 operations...........................

Shareholder's equity..................

Total average liabilities and
 shareholder's equity.................

Net interest income and average
 interest rate spread................. (Yen)781,256  1.04%
                                       ============  ====
Net interest income as a percentage
 of average total interest-earning
 assets...............................               1.08%
                                                     ====
</TABLE>

The percentage of average total assets attributable to foreign activities was
35.8%, 29.8% and 26.4%, respectively, for the fiscal years ended March 31,
2002, 2003 and 2004.

The percentage of average total liabilities attributable to foreign activities
was 35.9%, 30.2% and 27.0%, respectively, for the fiscal years ended March 31,
2002, 2003 and 2004.

                                      A-3

<PAGE>

Analysis of Net Interest Income

The following table shows changes in our net interest income between changes in
volume and changes in rate for the fiscal year ended March 31, 2003 compared to
the fiscal year ended March 31, 2002 and the fiscal year ended March 31, 2004
compared to the fiscal year ended March 31, 2003.

<TABLE>
<CAPTION>
                                               Fiscal year ended March 31, 2002            Fiscal year ended March 31, 2003
                                            versus fiscal year ended March 31, 2003     versus fiscal year ended March 31, 2004
                                          ------------------------------------------  ------------------------------------------
                                            Increase (decrease) due                     Increase (decrease) due
                                                 to changes in                               to changes in
                                          ---------------------------                 ---------------------------
                                             Volume          Rate        Net change      Volume          Rate        Net change
                                          ------------  -------------  -------------  ------------  -------------  -------------
                                                                               (in millions)
<S>                                       <C>           <C>            <C>            <C>           <C>            <C>
Interest income:
Interest-earning deposits in other banks:
   Domestic.............................. (Yen) (1,664) (Yen)  (5,358) (Yen)  (7,022) (Yen)   (566) (Yen)     858  (Yen)     292
   Foreign...............................      (42,908)       (35,614)       (78,522)      (10,934)       (12,867)       (23,801)
                                          ------------  -------------  -------------  ------------  -------------  -------------
       Total.............................      (44,572)       (40,972)       (85,544)      (11,500)       (12,009)       (23,509)
                                          ------------  -------------  -------------  ------------  -------------  -------------
Call loans, funds sold, and receivables
  under resale agreements and
  securities borrowing transactions:
   Domestic..............................       (2,867)          (614)        (3,481)        1,813         (2,927)        (1,114)
   Foreign...............................      (20,606)       (73,679)       (94,285)         (550)       (12,025)       (12,575)
                                          ------------  -------------  -------------  ------------  -------------  -------------
       Total.............................      (23,473)       (74,293)       (97,766)        1,263        (14,952)       (13,689)
                                          ------------  -------------  -------------  ------------  -------------  -------------
Trading account assets:
   Domestic..............................        1,967         (2,366)          (399)        6,021          6,663         12,684
   Foreign...............................         (402)          (461)          (863)           43          4,073          4,116
                                          ------------  -------------  -------------  ------------  -------------  -------------
       Total.............................        1,565         (2,827)        (1,262)        6,064         10,736         16,800
                                          ------------  -------------  -------------  ------------  -------------  -------------
Investment securities (see Note 2):
   Domestic..............................       11,046        (10,790)           256         7,752        (10,538)        (2,786)
   Foreign...............................       (4,120)       (22,139)       (26,259)       12,408        (22,938)       (10,530)
                                          ------------  -------------  -------------  ------------  -------------  -------------
       Total.............................        6,926        (32,929)       (26,003)       20,160        (33,476)       (13,316)
                                          ------------  -------------  -------------  ------------  -------------  -------------
Loans:
   Domestic..............................       22,747        (72,859)       (50,112)        9,717        (32,806)       (23,089)
   Foreign...............................       (5,376)      (141,321)      (146,697)      (31,837)       (51,875)       (83,712)
                                          ------------  -------------  -------------  ------------  -------------  -------------
       Total.............................       17,371       (214,180)      (196,809)      (22,120)       (84,681)      (106,801)
                                          ------------  -------------  -------------  ------------  -------------  -------------
Total interest income:
   Domestic..............................       31,229        (91,987)       (60,758)       24,737        (38,750)       (14,013)
   Foreign...............................      (73,412)      (273,214)      (346,626)      (30,870)       (95,632)      (126,502)
                                          ------------  -------------  -------------  ------------  -------------  -------------
       Total............................. (Yen)(42,183) (Yen)(365,201) (Yen)(407,384) (Yen) (6,133) (Yen)(134,382) (Yen)(140,515)
                                          ============  =============  =============  ============  =============  =============
</TABLE>
--------
Notes:
1. Rate/volume variance is allocated based on the percentage relationship of
   changes in volume and changes in rate to the total "net change."
2. Tax-exempt income of tax-exempt investment securities has not been
   calculated on a tax equivalent basis because the effect of such calculation
   would not be material.

                                      A-4

<PAGE>

<TABLE>
<CAPTION>
                                             Fiscal year ended March 31, 2002            Fiscal year ended March 31, 2003
                                          versus fiscal year ended March 31, 2003    versus fiscal year ended March 31, 2004
                                        ------------------------------------------  -----------------------------------------
                                            Increase (decrease)                         Increase (decrease)
                                             due to changes in                           due to changes in
                                        ---------------------------                 ---------------------------
                                           Volume          Rate        Net change      Volume          Rate       Net change
                                        ------------  -------------  -------------  ------------  -------------  ------------
                                                                            (in millions)
<S>                                     <C>           <C>            <C>            <C>           <C>            <C>
Interest expense:
Deposits:
   Domestic............................ (Yen)  6,996  (Yen) (53,956) (Yen) (46,960) (Yen)  2,189  (Yen) (16,968) (Yen)(14,779)
   Foreign.............................      (34,633)      (113,486)      (148,119)        2,170        (36,535)      (34,365)
                                        ------------  -------------  -------------  ------------  -------------  ------------
       Total...........................      (27,637)      (167,442)      (195,079)        4,359        (53,503)      (49,144)
                                        ------------  -------------  -------------  ------------  -------------  ------------
Debentures--Domestic...................      (11,063)        (1,025)       (12,088)       (5,358)           885        (4,473)
                                        ------------  -------------  -------------  ------------  -------------  ------------
Call money, funds purchased, and
  payables under repurchase
  agreements and securities lending
  transactions:
   Domestic............................       (1,000)       (15,578)       (16,578)        1,437          5,937         7,374
   Foreign.............................      (16,665)       (61,731)       (78,396)       (2,337)       (27,195)      (29,532)
                                        ------------  -------------  -------------  ------------  -------------  ------------
       Total...........................      (17,665)       (77,309)       (94,974)         (900)       (21,258)      (22,158)
                                        ------------  -------------  -------------  ------------  -------------  ------------
Other short-term borrowings and trading
  account liabilities:
   Domestic............................          471         (2,255)        (1,784)       14,351         (1,214)       13,137
   Foreign.............................      (10,816)        (1,909)       (12,725)         (861)        (8,764)       (9,625)
                                        ------------  -------------  -------------  ------------  -------------  ------------
       Total...........................      (10,345)        (4,164)       (14,509)       13,490         (9,978)        3,512
                                        ------------  -------------  -------------  ------------  -------------  ------------
Long-term debt:
   Domestic............................       14,873        (14,723)           150         9,386        (12,705)       (3,319)
   Foreign.............................      (12,078)       (18,655)       (30,733)      (10,755)        (9,850)      (20,605)
                                        ------------  -------------  -------------  ------------  -------------  ------------
       Total...........................        2,795        (33,378)       (30,583)       (1,369)       (22,555)      (23,924)
                                        ------------  -------------  -------------  ------------  -------------  ------------
Total interest expense:
   Domestic............................       10,277        (87,537)       (77,260)       22,005        (24,065)       (2,060)
   Foreign.............................      (74,192)      (195,781)      (269,973)      (11,783)       (82,344)      (94,127)
                                        ------------  -------------  -------------  ------------  -------------  ------------
       Total........................... (Yen)(63,915) (Yen)(283,318) (Yen)(347,233) (Yen) 10,222  (Yen)(106,409) (Yen)(96,187)
                                        ------------  -------------  -------------  ------------  -------------  ------------
Net interest income:
   Domestic............................ (Yen) 20,952  (Yen)  (4,450) (Yen)  16,502  (Yen)  2,732  (Yen) (14,685) (Yen)(11,953)
   Foreign.............................          780        (77,433)       (76,653)      (19,087)       (13,288)      (32,375)
                                        ------------  -------------  -------------  ------------  -------------  ------------
       Total........................... (Yen) 21,732  (Yen) (81,883) (Yen) (60,151) (Yen)(16,355) (Yen) (27,973) (Yen)(44,328)
                                        ============  =============  =============  ============  =============  ============
</TABLE>
--------
Note--Rate/volume variance is allocated based on the percentage relationship of
changes in volume and changes in rate to the total "net change."

                                      A-5

<PAGE>

II. Investment Portfolio

The following table shows information as to the value of our investment
securities available for sale and being held to maturity at March 31, 2002,
2003 and 2004.

<TABLE>
<CAPTION>
                                                                                                  At March 31,
                                   -------------------------------------------------------------------------------------------
                                                        2002                                          2003
                                   ---------------------------------------------- --------------------------------------------
                                                      Estimated         Net                          Estimated        Net
                                      Amortized        market        unrealized      Amortized        market       unrealized
                                        cost            value          gains           cost            value         gains
                                   --------------- --------------- -------------- --------------- --------------- ------------
                                                                                                 (in millions)
<S>                                <C>             <C>             <C>            <C>             <C>             <C>
Securities available for sale:
Domestic:
 Japanese national government and
  Japanese government agency
  bonds........................... (Yen) 8,024,768 (Yen) 8,051,029 (Yen)   26,261 (Yen) 8,755,763 (Yen) 8,810,317 (Yen) 54,554
 Corporate bonds..................       1,184,501       1,189,777          5,276         839,507         842,296        2,789
 Marketable equity securities.....       2,438,186       3,697,430      1,259,244       1,970,134       2,564,430      594,296
 Other securities.................         482,148         488,011          5,863         491,667         498,619        6,952
                                   --------------- --------------- -------------- --------------- --------------- ------------
   Total domestic.................      12,129,603      13,426,247      1,296,644      12,057,071      12,715,662      658,591
                                   --------------- --------------- -------------- --------------- --------------- ------------
Foreign:
 U.S. Treasury and other U.S.
  government agencies bonds.......         693,114         707,582         14,468         870,486         874,569        4,083
 Other governments and official
  institutions bonds..............         985,316       1,014,857         29,541       1,274,176       1,325,494       51,318
 Mortgage-backed securities.......       1,067,198       1,115,980         48,782       1,139,648       1,151,042       11,394
 Other securities.................         889,788         920,431         30,643         719,867         734,359       14,492
                                   --------------- --------------- -------------- --------------- --------------- ------------
   Total foreign..................       3,635,416       3,758,850        123,434       4,004,177       4,085,464       81,287
                                   --------------- --------------- -------------- --------------- --------------- ------------
    Total......................... (Yen)15,765,019 (Yen)17,185,097 (Yen)1,420,078 (Yen)16,061,248 (Yen)16,801,126 (Yen)739,878
                                   =============== =============== ============== =============== =============== ============
Securities being held to maturity:
Domestic:
 Japanese national government and
  Japanese government agency
  bonds........................... (Yen)        -- (Yen)        -- (Yen)       -- (Yen)        -- (Yen)        -- (Yen)     --
 Corporate bonds..................              --              --             --              --              --           --
                                   --------------- --------------- -------------- --------------- --------------- ------------
   Total domestic.................              --              --             --              --              --           --
                                   --------------- --------------- -------------- --------------- --------------- ------------
Foreign:
 U.S. Treasury and other U.S.
  government agencies bonds.......              --              --             --              --              --           --
 Other governments and official
  institutions bonds..............              --              --             --              --              --           --
 Other securities.................              --              --             --              --              --           --
                                   --------------- --------------- -------------- --------------- --------------- ------------
   Total foreign..................              --              --             --              --              --           --
                                   --------------- --------------- -------------- --------------- --------------- ------------
    Total......................... (Yen)        -- (Yen)        -- (Yen)       -- (Yen)        -- (Yen)        -- (Yen)     --
                                   =============== =============== ============== =============== =============== ============
</TABLE>
<TABLE>
<CAPTION>

                                   -----------------------------------------------
                                                        2004
                                   ----------------------------------------------
                                                      Estimated         Net
                                      Amortized        market        unrealized
                                        cost            value          gains
                                   --------------- --------------- --------------

<S>                                <C>             <C>             <C>
Securities available for sale:
Domestic:
 Japanese national government and
  Japanese government agency
  bonds........................... (Yen)12,599,395 (Yen)12,607,790 (Yen)    8,395
 Corporate bonds..................       1,027,342       1,028,679          1,337
 Marketable equity securities.....       1,628,489       2,933,095      1,304,606
 Other securities.................         253,683         256,205          2,522
                                   --------------- --------------- --------------
   Total domestic.................      15,508,909      16,825,769      1,316,860
                                   --------------- --------------- --------------
Foreign:
 U.S. Treasury and other U.S.
  government agencies bonds.......         887,851         900,256         12,405
 Other governments and official
  institutions bonds..............         520,229         523,739          3,510
 Mortgage-backed securities.......       1,118,981       1,145,084         26,103
 Other securities.................         853,835         891,918         38,083
                                   --------------- --------------- --------------
   Total foreign..................       3,380,896       3,460,997         80,101
                                   --------------- --------------- --------------
    Total......................... (Yen)18,889,805 (Yen)20,286,766 (Yen)1,396,961
                                   =============== =============== ==============
Securities being held to maturity:
Domestic:
 Japanese national government and
  Japanese government agency
  bonds........................... (Yen)   996,398 (Yen)   996,785 (Yen)      387
 Corporate bonds..................             997             997             --
                                   --------------- --------------- --------------
   Total domestic.................         997,395         997,782            387
                                   --------------- --------------- --------------
Foreign:
 U.S. Treasury and other U.S.
  government agencies bonds.......           5,584           5,584             --
 Other governments and official
  institutions bonds..............          12,528          12,608             80
 Other securities.................          36,686          36,688              2
                                   --------------- --------------- --------------
   Total foreign..................          54,798          54,880             82
                                   --------------- --------------- --------------
    Total......................... (Yen) 1,052,193 (Yen) 1,052,662 (Yen)      469
                                   =============== =============== ==============
</TABLE>

Nonmarketable equity securities, presented in Other investment securities in
the consolidated financial statements, were carried at costs of (Yen)99,029
million, (Yen)113,054 million and (Yen)160,343 million, at March 31, 2002, 2003
and 2004, respectively. The corresponding estimated fair values at those dates
were not readily determinable.

                                      A-6

<PAGE>

The following table presents the book values, maturities and weighted average
yields of investment securities available for sale and being held to maturity,
excluding equity securities, at March 31, 2004. Weighted average yields are
calculated based on amortized cost. Yields on tax-exempt obligations have not
been calculated on a tax equivalent basis because the effect of such
calculation would not be material:

<TABLE>
<CAPTION>
                                                          Maturities after one           Maturities after
                                  Maturities              year but within five            five years but
                                within one year                   years                  within ten years
                             --------------------         --------------------         --------------------
                                 Amount          Yield        Amount          Yield        Amount          Yield
                             --------------     ------    --------------     ------    --------------     ------
                                                                   (in millions, except percentages)
<S>                          <C>                <C>       <C>                <C>       <C>                <C>
Securities available for
 sale:
  Domestic:
   Japanese national
    government and
    Japanese government
    agency bonds............ (Yen)7,412,942      0.04%    (Yen)3,396,897      0.75%    (Yen)  789,031      1.38%
   Corporate bonds..........        170,747     1.77             810,568     0.87              47,259     0.94
   Other securities.........         78,089     3.96             133,910     2.47              18,974     1.93
                             --------------      ----     --------------      ----     --------------      ----
      Total domestic........      7,661,778      0.12          4,341,375      0.83            855,264      1.36
                             --------------      ----     --------------      ----     --------------      ----
  Foreign:
   U.S. Treasury and other
    U.S. government
    agencies bonds..........        128,158     6.30             661,242     2.81              70,641     4.41
   Other governments and
    official institutions
    bonds...................        163,452     1.85             272,476     2.96              80,844     3.71
   Mortgage-backed
    securities..............         36,471     1.52               2,695     6.57             111,589     3.88
   Other securities.........         93,045     1.66             452,342     1.93              65,824     2.80
                             --------------      ----     --------------      ----     --------------      ----
      Total foreign.........        421,126      3.12          1,388,755      2.57            328,898      3.72
                             --------------      ----     --------------      ----     --------------      ----
       Total................ (Yen)8,082,904      0.27%    (Yen)5,730,130      1.24%    (Yen)1,184,162      2.01%
                             ==============      ====     ==============      ====     ==============      ====
Securities being held to
 maturity:
  Domestic:
   Japanese national
    government and
    Japanese government      (Yen)       --                                            (Yen)       --
    agency bonds............                     -- %     (Yen)  996,398     0.43%                         -- %
   Corporate bonds..........             --       --                  --       --                  --       --
                             --------------      ----     --------------      ----     --------------      ----
      Total domestic........             --        --            996,398      0.43                 --        --
                             --------------      ----     --------------      ----     --------------      ----
  Foreign:
   U.S. Treasury and other
    U.S. government
    agencies bonds..........             --       --               1,168     7.96                  --       --
   Other governments and
    official institutions
    bonds...................          4,360     4.06               8,168     4.85                  --       --
   Other securities.........          2,263     2.30              28,572     1.98               5,851     1.04
                             --------------      ----     --------------      ----     --------------      ----
      Total foreign.........          6,623      3.46             37,908      2.78              5,851      1.04
                             --------------      ----     --------------      ----     --------------      ----
       Total................ (Yen)    6,623      3.46%    (Yen)1,034,306      0.52%    (Yen)    5,851      1.04%
                             ==============      ====     ==============      ====     ==============      ====
</TABLE>
<TABLE>
<CAPTION>
                                  Maturities
                                     after
                                   ten years                      Total
                             --------------------         ---------------------
                                 Amount          Yield        Amount           Yield
                             --------------     ------    ---------------     ------

<S>                          <C>                <C>       <C>                 <C>
Securities available for
 sale:
  Domestic:
   Japanese national
    government and
    Japanese government
    agency bonds............ (Yen)1,008,920      0.88%    (Yen)12,607,790      0.38%
   Corporate bonds..........            105 0.00        1,028,679 1.02
   Other securities.........         25,232 0.54          256,205 2.69
                             --------------      ----     ---------------      ----
      Total domestic........      1,034,257      0.87          13,892,674      0.47
                             --------------      ----     ---------------      ----
  Foreign:
   U.S. Treasury and other
    U.S. government
    agencies bonds..........         40,215 4.02          900,256 3.47
   Other governments and
    official institutions
    bonds...................          6,967 5.75          523,739 2.76
   Mortgage-backed
    securities..............        994,329 3.63        1,145,084 3.59
   Other securities.........         73,089 4.54          684,300 2.25
                             --------------      ----     ---------------      ----
      Total foreign.........      1,114,600      3.70           3,253,379      3.14
                             --------------      ----     ---------------      ----
       Total................ (Yen)2,148,857      2.32%    (Yen)17,146,053      0.97%
                             ==============      ====     ===============      ====
Securities being held to
 maturity:
  Domestic:
   Japanese national
    government and
    Japanese government      (Yen)       --
    agency bonds............                 -- % (Yen)   996,398 0.43%
   Corporate bonds..........            997 1.50              997 1.50
                             --------------      ----     ---------------      ----
      Total domestic........            997      1.50             997,395      0.43
                             --------------      ----     ---------------      ----
  Foreign:
   U.S. Treasury and other
    U.S. government
    agencies bonds..........          4,416 7.90            5,584 7.92
   Other governments and
    official institutions
    bonds...................             --   --           12,528 4.57
   Other securities.........             --   --           36,686 1.85
                             --------------      ----     ---------------      ----
      Total foreign.........          4,416      7.90              54,798      3.09
                             --------------      ----     ---------------      ----
       Total................ (Yen)    5,413      6.72%    (Yen) 1,052,193      0.57%
                             ==============      ====     ===============      ====
</TABLE>

Excluding U.S. Treasury and other U.S. government agencies bonds and Japanese
national government bonds, the following table sets forth the securities of
individual issuers held in our investment securities portfolio which exceeded
10% of our consolidated shareholder's equity at March 31, 2004.

<TABLE>
<CAPTION>
                                                                                  Amortized      Fair
                                                                                    cost         value
                                                                                 ------------ ------------
                                                                                       (in millions)
<S>                                                                              <C>          <C>
Mortgage-backed securities issued by U.S. Federal National Mortgage Association. (Yen)559,474 (Yen)557,761
Mortgage-backed securities issued by U.S. Federal Home Loan Mortgage Corporation      538,826      537,508
Deposit Insurance Corporation of Japan..........................................      329,399      329,521
</TABLE>

                                      A-7

<PAGE>

III. Loan Portfolio

The following table shows our loans outstanding, before deduction of allowance
for credit losses, by domicile and type of industry of borrower at March 31 of
each of the five fiscal years ended March 31, 2004. Classification of loans by
industry is based on the industry segment loan classification as defined by the
Bank of Japan for regulatory reporting purposes and is not necessarily based on
use of proceeds:

<TABLE>
<CAPTION>
                                                                                                At March 31,
                                  ----------------------------------------------------------------------------------------------
                                       2000            2001               2002                           2003
                                  --------------- --------------- ---------------      ------------------------------------
                                       Old             Old                Old                  Old                  New
                                  classification  classification     classification       classification       classification
                                  --------------- --------------- ---------------      ---------------      ---------------
                                                                                               (in millions)
<S>                               <C>             <C>             <C>                  <C>                  <C>
Domestic:
  Manufacturing.................. (Yen) 5,597,318 (Yen) 5,232,119 (Yen) 5,081,824      (Yen) 4,791,882      (Yen) 4,714,708
  Construction...................       1,460,653       1,400,401       1,225,068              995,918              995,918
  Real estate....................       3,698,842       3,974,597       3,618,859            3,245,721            3,245,721
  Services.......................       3,813,850       3,729,534       3,597,009            4,302,974            4,249,086
  Wholesale and retail...........       5,956,815       5,705,179       5,142,845            4,880,193            4,723,010
  Banks and other financial
   institutions/(1)/.............       2,193,633       2,012,321       2,201,470            1,800,592            1,800,592
  Communication and information
   services......................              --              --              --                   --            1,264,713
  Other industries...............       3,155,294       1,589,648       2,781,122            3,621,243            2,644,775
  Consumer.......................       6,873,500       6,661,251       6,687,523            6,994,224            6,994,224
                                  --------------- --------------- ---------------      ---------------      ---------------
   Total domestic................      32,749,905      30,305,050      30,335,720           30,632,747           30,632,747
                                  --------------- --------------- ---------------      ---------------      ---------------
Foreign:
  Governments and official
   institutions..................         223,219         296,003         308,574              227,685              227,685
  Banks and other financial
   institutions/(1)/.............         482,235         581,433         493,800              777,697              777,697
  Commercial and industrial......       6,993,928       8,218,468       9,271,565            8,127,334            8,127,334
  Other..........................         548,423         804,434         644,003              267,301              267,301
                                  --------------- --------------- ---------------      ---------------      ---------------
   Total foreign.................       8,247,805       9,900,338      10,717,942            9,400,017            9,400,017
                                  --------------- --------------- ---------------      ---------------      ---------------
    Total........................      40,997,710      40,205,388      41,053,662           40,032,764           40,032,764
Less unearned income and deferred
 loan fees--net..................          30,205          30,233          41,501               40,387               40,387
                                  --------------- --------------- ---------------      ---------------      ---------------
    Total........................ (Yen)40,967,505 (Yen)40,175,155 (Yen)41,012,161/(2)/ (Yen)39,992,377/(2)/ (Yen)39,992,377/(2)/
                                  =============== =============== ===============      ===============      ===============
</TABLE>
<TABLE>
<CAPTION>

                                  -------------------------------------
                                                    2004
                                  ------------------------------------
                                          Old                  New
                                     classification       classification
                                  ---------------      ---------------

<S>                               <C>                  <C>
Domestic:
  Manufacturing.................. (Yen) 4,758,303      (Yen) 4,692,433
  Construction...................         832,758              832,758
  Real estate....................       3,515,717            3,515,717
  Services.......................       3,898,336            3,661,758
  Wholesale and retail...........       4,445,790            4,311,980
  Banks and other financial
   institutions/(1)/.............       1,765,377            1,765,377
  Communication and information
   services......................              --              650,983
  Other industries...............       4,965,300            4,750,575
  Consumer.......................       7,473,998            7,473,998/(3)/
                                  ---------------      ---------------
   Total domestic................      31,655,579           31,655,579
                                  ---------------      ---------------
Foreign:
  Governments and official
   institutions..................         178,402              178,402
  Banks and other financial
   institutions/(1)/.............         904,841              904,841
  Commercial and industrial......       7,063,034            7,063,034
  Other..........................         156,369              156,369
                                  ---------------      ---------------
   Total foreign.................       8,302,646            8,302,646
                                  ---------------      ---------------
    Total........................      39,958,225           39,958,225
Less unearned income and deferred
 loan fees--net..................          27,183               27,183
                                  ---------------      ---------------
    Total........................ (Yen)39,931,042/(2)/ (Yen)39,931,042/(2)/
                                  ===============      ===============
</TABLE>
--------
Notes:
(1)Loans to the so-called non-bank finance companies are generally included in
   the "Banks and other financial institutions" category. Non-bank finance
   companies are primarily engaged in consumer lending, factoring and credit
   card businesses.
(2)The above table includes loans held for sale of (Yen)3,178 million,
   (Yen)3,360 million and (Yen)9,960 million at March 31, 2002, 2003 and 2004,
   respectively.
(3)Domestic loans within the "consumer" category in the above table include
   loans to individuals who utilize loan proceeds to finance their proprietor
   activities and not for their personal financing needs. During the fiscal
   year ended March 31, 2004, our credit administration system was upgraded and
   we are now able to present a precise breakdown of the balance of such
   consumer loans at March 31, 2004 by the type of proprietor business. This
   breakdown is presented below in accordance with our new classification:

<TABLE>
<CAPTION>
                                                                  Banks and   Communication
                                                                    other          and                      Total
                               Real                  Wholesale    financial    information    Other      included in
Manufacturing Construction    estate      Services   and retail  institutions   services    industries    Consumer
------------- ------------ ------------ ------------ ----------- ------------ ------------- ----------- --------------
                                                    (in millions)
<S>           <C>          <C>          <C>          <C>         <C>          <C>           <C>         <C>
 (Yen)28,229  (Yen)19,283  (Yen)738,377 (Yen)230,730 (Yen)52,253  (Yen)1,200   (Yen)4,121   (Yen)10,620 (Yen)1,084,813
</TABLE>

   Since the system upgrade was effective during the fiscal year ended March
   31, 2004, no equivalent information is obtainable for prior fiscal year-end
   dates.

                                      A-8

<PAGE>

Maturities and Sensitivities of Loans to Changes in Interest Rates

The following table shows the maturities of our loan portfolio at March 31,
2004:

<TABLE>
<S>                                          <C>              <C>               <C>             <C>
Old Classification
                                                                          Maturity
                                             ------------------------------------------------------------------
                                             One year or less One to five years Over five years      Total
                                             ---------------- ----------------- --------------- ---------------
                                                                       (in millions)
Domestic:
   Manufacturing............................ (Yen) 3,322,976   (Yen) 1,291,469  (Yen)  143,858  (Yen) 4,758,303
   Construction.............................         597,326           188,959          46,473          832,758
   Real estate..............................       1,182,969         1,088,789       1,243,959        3,515,717
   Services.................................       2,270,589         1,141,567         486,180        3,898,336
   Wholesale and retail.....................       3,007,702         1,321,757         116,331        4,445,790
   Banks and other financial institutions...       1,028,965           516,290         220,122        1,765,377
   Other industries.........................       3,898,919           861,431         204,950        4,965,300
   Consumer:
       Installment loans to individuals.....          91,706         1,616,049       5,196,140        6,903,895
       Other................................         464,119            44,821          61,163          570,103
                                             ---------------   ---------------  --------------  ---------------
                                                     555,825         1,660,870       5,257,303        7,473,998
                                             ---------------   ---------------  --------------  ---------------
          Total domestic....................      15,865,271         8,071,132       7,719,176       31,655,579
Foreign.....................................       4,329,866         2,305,432       1,667,348        8,302,646
                                             ---------------   ---------------  --------------  ---------------
          Total............................. (Yen)20,195,137   (Yen)10,376,564  (Yen)9,386,524  (Yen)39,958,225
                                             ===============   ===============  ==============  ===============

New Classification
                                                                          Maturity
                                             ------------------------------------------------------------------
                                             One year or less One to five years Over five years      Total
                                             ---------------- ----------------- --------------- ---------------
                                                                       (in millions)
Domestic:
   Manufacturing............................ (Yen) 3,273,989   (Yen) 1,280,132  (Yen)  138,312  (Yen) 4,692,433
   Construction.............................         597,326           188,959          46,473          832,758
   Real estate..............................       1,182,969         1,088,789       1,243,959        3,515,717
   Services.................................       2,080,055         1,094,994         486,709        3,661,758
   Wholesale and retail.....................       2,939,470         1,273,166          99,344        4,311,980
   Banks and other financial institutions...       1,028,965           516,290         220,122        1,765,377
   Communication and information services...         476,746           142,233          32,004          650,983
   Other industries.........................       3,729,926           825,699         194,950        4,750,575
   Consumer:
       Installment loans to individuals.....          91,706         1,616,049       5,196,140        6,903,895
       Other................................         464,119            44,821          61,163          570,103
                                             ---------------   ---------------  --------------  ---------------
                                                     555,825         1,660,870       5,257,303        7,473,998
                                             ---------------   ---------------  --------------  ---------------
          Total domestic....................      15,865,271         8,071,132       7,719,176       31,655,579
Foreign.....................................       4,329,866         2,305,432       1,667,348        8,302,646
                                             ---------------   ---------------  --------------  ---------------
          Total............................. (Yen)20,195,137   (Yen)10,376,564  (Yen)9,386,524  (Yen)39,958,225
                                             ===============   ===============  ==============  ===============
</TABLE>

                                      A-9

<PAGE>

The above loans due after one year which had predetermined interest rates and
floating or adjustable interest rates at March 31, 2004 are shown below.

<TABLE>
<CAPTION>
                                  Domestic        Foreign          Total
                               --------------- -------------- ---------------
                                               (in millions)
   <S>                         <C>             <C>            <C>
   Predetermined rate......... (Yen) 6,623,081 (Yen)1,544,263 (Yen) 8,167,344
   Floating or adjustable rate       9,167,227      2,428,517      11,595,744
                               --------------- -------------- ---------------
      Total................... (Yen)15,790,308 (Yen)3,972,780 (Yen)19,763,088
                               =============== ============== ===============
</TABLE>

Nonaccrual, Past Due and Restructured Loans

We generally discontinue the accrual of interest income on loans when
substantial doubt exists as to the full and timely collection of either
principal or interest, or when principal or interest is contractually past due
one month or more with respect to loans of us and certain domestic
subsidiaries, and 90 days or more with respect to loans of certain foreign
subsidiaries.

                                     A-10

<PAGE>

The following table shows the distribution of our nonaccrual loans,
restructured loans and accruing loans which are contractually past due 90 days
or more as to principal or interest payments at March 31 of each of the five
fiscal years ended March 31, 2004, based on the domicile and type of industry
of the borrowers:

<TABLE>
<CAPTION>
                                                                                            At March 31,
                                              --------------------------------------------------------------------------
                                                   2000           2001           2002                  2003
                                              -------------- -------------- -------------- -----------------------------
                                                   Old            Old            Old            Old            New
                                              classification classification classification classification classification
                                              -------------- -------------- -------------- -------------- --------------
                                                                                           (in millions)
<S>                                           <C>            <C>            <C>            <C>            <C>
Nonaccrual loans:
  Domestic:
   Manufacturing............................. (Yen)   96,227 (Yen)  109,726 (Yen)  115,383 (Yen)   74,609 (Yen)   73,635
   Construction..............................        106,366        165,991        142,867         62,951         62,951
   Real estate...............................        497,814        618,146        511,435        198,792        198,792
   Services..................................        190,165        188,598        149,517         63,765         65,506
   Wholesale and retail......................        354,157        214,691        223,786        209,645        195,423
   Banks and other financial institutions....         56,945         87,703         46,115         15,016         15,016
   Communication and information
    services.................................             --             --             --             --         13,863
   Other industries..........................         21,353         30,423         27,250         31,346         30,938
   Consumer..................................         55,159        161,665        157,241        147,110        147,110
                                              -------------- -------------- -------------- -------------- --------------
    Total domestic...........................      1,378,186      1,576,943      1,373,594        803,234        803,234
                                              -------------- -------------- -------------- -------------- --------------
  Foreign:
   Governments and official institutions.....          1,032          2,336          3,341          1,734          1,734
   Banks and other financial institutions....         12,425          7,829          8,393          7,694          7,694
   Commercial and industrial.................        125,712        148,966        220,166        251,110        251,110
   Other.....................................         21,218         23,321          1,871          5,350          5,350
                                              -------------- -------------- -------------- -------------- --------------
    Total foreign............................        160,387        182,452        233,771        265,888        265,888
                                              -------------- -------------- -------------- -------------- --------------
    Total....................................      1,538,573      1,759,395      1,607,365      1,069,122      1,069,122
                                              ============== ============== ============== ============== ==============
Restructured loans:
  Domestic...................................        277,003      1,574,503      1,522,078        945,261        945,261
  Foreign....................................         44,774         86,983         97,052         83,193         83,193
                                              -------------- -------------- -------------- -------------- --------------
    Total....................................        321,777      1,661,486      1,619,130      1,028,454      1,028,454
                                              ============== ============== ============== ============== ==============
Accruing loans contractually past due 90 days
 or more:
  Domestic...................................         61,022         23,254         15,023         15,212         15,212
  Foreign....................................          1,273          2,008          2,763          2,866          2,866
                                              -------------- -------------- -------------- -------------- --------------
    Total....................................         62,295         25,262         17,786         18,078         18,078
                                              ============== ============== ============== ============== ==============
    Total.................................... (Yen)1,922,645 (Yen)3,446,143 (Yen)3,244,281 (Yen)2,115,654 (Yen)2,115,654
                                              ============== ============== ============== ============== ==============
</TABLE>
<TABLE>
<CAPTION>

                                              ------------------------------
                                                          2004
                                              -----------------------------
                                                   Old            New
                                              classification classification
                                              -------------- --------------

<S>                                           <C>            <C>
Nonaccrual loans:
  Domestic:
   Manufacturing............................. (Yen)   99,069 (Yen)   98,856
   Construction..............................         42,619         42,619
   Real estate...............................        125,405        125,405
   Services..................................         34,648         39,514
   Wholesale and retail......................         93,637         84,095
   Banks and other financial institutions....         15,789         15,789
   Communication and information
    services.................................             --          5,128
   Other industries..........................         14,744         14,505
   Consumer..................................        137,690        137,690
                                              -------------- --------------
    Total domestic...........................        563,601        563,601
                                              -------------- --------------
  Foreign:
   Governments and official institutions.....            877            877
   Banks and other financial institutions....         84,623         84,623
   Commercial and industrial.................        127,423        127,423
   Other.....................................         13,942         13,942
                                              -------------- --------------
    Total foreign............................        226,865        226,865
                                              -------------- --------------
    Total....................................        790,466        790,466
                                              ============== ==============
Restructured loans:
  Domestic...................................        381,063        381,063
  Foreign....................................         45,739         45,739
                                              -------------- --------------
    Total....................................        426,802        426,802
                                              ============== ==============
Accruing loans contractually past due 90 days
 or more:
  Domestic...................................         11,092         11,092
  Foreign....................................            887            887
                                              -------------- --------------
    Total....................................         11,979         11,979
                                              ============== ==============
    Total.................................... (Yen)1,229,247 (Yen)1,229,247
                                              ============== ==============
</TABLE>
--------
Notes:
(1)The above table does not include real estate acquired in full or partial
   satisfaction of debt and certain assets under the management of the
   Cooperative Credit Purchasing Company which are recorded at estimated fair
   value less estimated cost to sell.
(2)Domestic nonaccrual loans within the "consumer" category in the above table
   include loans to individuals who utilize loan proceeds to finance their
   proprietor activities and not for their personal financing needs. During the
   fiscal year ended March 31, 2004, our credit administration system was
   upgraded and we are now able to present a precise breakdown of the balance
   of such consumer loans at March 31, 2004 by the type of proprietor business.
   This breakdown is presented below in accordance with our new classification:

<TABLE>
<CAPTION>
                                                               Banks and   Communication              Total
                                                                 other          and                  included
                              Real                 Wholesale   financial    information    Other        in
Manufacturing Construction   estate     Services   and retail institutions   services    industries  Consumer
------------- ------------ ----------- ----------- ---------- ------------ ------------- ---------- -----------
                                                 (in millions)
<S>           <C>          <C>         <C>         <C>        <C>          <C>           <C>        <C>
 (Yen)1,566     (Yen)877   (Yen)52,271 (Yen)14,203 (Yen)5,765   (Yen)21      (Yen)264        --     (Yen)74,967
</TABLE>

   Since the system upgrade was effective during the fiscal year ended March
   31, 2004, no equivalent information is obtainable for prior fiscal year-end
   dates.

                                     A-11

<PAGE>

Gross interest income which would have been accrued at the original terms on
domestic nonaccrual and restructured loans outstanding during the fiscal year
ended March 31, 2004 was approximately (Yen)23.1 billion, of which (Yen)18.0
billion was included in the results of operations for the fiscal year. Gross
interest income which would have been accrued at the original terms on foreign
nonaccrual and restructured loans outstanding for the fiscal year ended March
31, 2004 was approximately (Yen)10.5 billion, of which (Yen)4.7 billion was
included in the results of operations for the fiscal year.

Foreign Loans Outstanding

We had no cross-border outstandings to borrowers in any foreign country in
which total exceeded 0.75% of consolidated total assets at March 31, 2002, 2003
and 2004. Cross-border outstandings are defined, for this purpose, as loans
(including accrued interest), acceptances, interest-earning deposits with other
banks, other interest-earning investments and any other monetary assets
denominated in Japanese yen or other non-local currencies. Material local
currency loans outstanding which are neither hedged nor funded by local
currency borrowings are included in cross-border outstandings.

Guarantees of outstandings of borrowers of other countries are considered to be
outstandings of the guarantor. Loans made to, or deposits placed with, a branch
of a foreign bank located outside the foreign bank's home country are
considered to be loans to, or deposits with, the foreign bank. Outstandings of
a country do not include principal or interest amounts of which are supported
by written, legally enforceable guarantees by guarantors of other countries or
the amounts of outstandings to the extent that they are secured by tangible,
liquid collateral held and realizable by us and its subsidiaries outside the
country in which they operate.

In addition to credit risk, cross-border outstandings are subject to country
risk that as a result of political or economic conditions in a country,
borrowers may be unable or unwilling to pay principal and interest according to
contractual terms. Other risks related to cross-border outstandings include the
possibility of insufficient foreign exchange and restrictions on its
availability.

In order to manage country risk, we establish various risk management measures
internally. Among other things, we first regularly monitor economic conditions
and other factors globally and assess country risk in each country where we
have cross-border exposure. For purposes of monitoring and controlling the
amount of credit exposed to country risk, we set a country limit, the maximum
amount of credit exposure for an individual country, in consideration of the
level of country risk and our ability to bear such potential risk. We also
determine our credit policy for each country in accordance with its country
risk level and our business plan with regard to the country. Assessment of
country risk, establishment of country limits, and determination of country
credit policies are subject to review and approval by our senior management and
are updated periodically.

Exposure to East Asia

We maintain a substantial network of branches and subsidiaries in East Asia and
the region has been an important market for our financial services. Certain
economies in this region are growing at a rapid pace, while the economy is not
always stable and exposed to country risk to a greater extent than developed
countries. In response to on-going and possible developments in the regional
economy, we regularly reassess the country risk of each country in the region,
to adjust exposure levels, and to review and revise country credit policies.

                                     A-12

<PAGE>

The following table represents our cross-border outstandings and unused
commitments at March 31, 2003 and 2004, to certain East Asian countries:

<TABLE>
<CAPTION>
                                               At March 31,
                             -------------------------------------------------
                                       2003                     2004
                             ------------------------ ------------------------
                             Cross-border   Unused    Cross-border   Unused
                             outstanding  commitments outstanding  commitments
                             ------------ ----------- ------------ -----------
                                               (in billions)
  <S>                        <C>          <C>         <C>          <C>
  South Korea...............  (Yen)240.4   (Yen) 1.3   (Yen)191.1   (Yen)0.5
  Indonesia.................        26.6        33.7         22.5         --
  Thailand..................       146.4         7.8        145.6        4.4
  Malaysia..................        84.0         2.2         84.7        1.0
  Philippines...............        46.9         3.6         41.2         --
  Hong Kong.................       176.2          --        300.6         --
  People's Republic of China       132.1         8.8        194.6        0.7
  Singapore.................       257.2        16.6        211.4        1.6
</TABLE>

Exposure to Latin America

Similar to economies in East Asia, growth of economy is expected while
unstability is observed in Latin America region. The following is a summary of
cross-border outstandings to counterparties in major Latin American countries
at March 31, 2003 and 2004:

<TABLE>
<CAPTION>
                                       At March 31,
                                   --------------------
                                      2003      2004
                                   ---------- ---------
                                      (in billions)
                         <S>       <C>        <C>
                         Brazil... (Yen)119.2 (Yen)82.0
                         Mexico...       74.3      45.0
                         Argentina       34.1      18.2
</TABLE>

Loan Concentrations

At March 31, 2004, there were no concentrations of loans to a single industry
group of borrowers, as defined by the Bank of Japan industry segment loan
classifications, which exceeded 10% of our consolidated total loans, except for
loans in a category disclosed in the table of loans outstanding above.

Credit Risk Management

We have a credit rating system, under which borrowers and transactions are
graded on a worldwide basis. We calculate probability of default by statistical
means and manage our credit portfolio based on this credit rating system. For a
detailed description of this system and other elements of our risk management
structure, see "Item 11. Quantitative and Qualitative Disclosures about Credit,
Market and Other Risk--Credit Risk Management."

                                     A-13

<PAGE>

IV. Summary of Loan Loss Experience

The following table shows an analysis of our loan loss experience by type of
borrowers' business for each of the five fiscal years ended March 31, 2004:

<TABLE>
<CAPTION>
                                                                                        Fiscal years ended March 31,
                                             -------------------------------------------------------------------------------
                                                  2000            2001            2002                    2003
                                             --------------  --------------  --------------  ------------------------------
                                                  Old             Old             Old             Old             New
                                             classification  classification  classification  classification  classification
                                             --------------  --------------  --------------  --------------  --------------
                                                                                      (in millions, except percentages)
<S>                                          <C>             <C>             <C>             <C>             <C>
Allowance for credit losses at beginning of
 fiscal year................................ (Yen)1,290,657  (Yen)1,137,181  (Yen)1,385,010  (Yen)1,341,608  (Yen)1,341,608
                                             --------------  --------------  --------------  --------------  --------------
Provision (credit) for credit losses........        351,914         652,728         466,947         287,282         287,282
                                             --------------  --------------  --------------  --------------  --------------
Charge-offs:
   Domestic:
      Manufacturing.........................         24,970          26,254          45,226          65,823          65,671
      Construction..........................         67,394          39,447          24,063          48,559          48,559
      Real estate...........................         15,029          96,371         112,757         181,203         181,203
      Services..............................         34,666          52,535          35,349          40,599          45,946
      Wholesale and retail..................        188,706         134,381          80,622         105,952          98,106
      Banks and other financial
       institutions.........................         27,970          15,815          60,333          18,945          18,945
      Communication and information
       services.............................             --              --              --              --           4,865
      Other industries......................         47,301           4,469           5,236          24,781          22,567
      Consumer..............................         39,101          33,725          43,059          38,042          38,042
                                             --------------  --------------  --------------  --------------  --------------
   Total domestic...........................        445,137         402,997         406,645         523,904         523,904
                                             --------------  --------------  --------------  --------------  --------------
   Total foreign............................        102,746          77,050         107,344         116,218         116,218
                                             --------------  --------------  --------------  --------------  --------------
      Total.................................        547,883         480,047         513,989         640,122         640,122
                                             --------------  --------------  --------------  --------------  --------------
Recoveries:
   Domestic.................................         23,137          16,341          30,865          49,074          49,074
   Foreign..................................         17,867          18,439          17,944          17,574          17,574
                                             --------------  --------------  --------------  --------------  --------------
      Total.................................         41,004          34,780          48,809          66,648          66,648
                                             --------------  --------------  --------------  --------------  --------------
Net charge-offs.............................        506,879         445,267         465,180         573,474         573,474
                                             --------------  --------------  --------------  --------------  --------------
Others/(1)/.................................          1,489          40,368          12,333           3,217           3,217
                                             --------------  --------------  --------------  --------------  --------------
The deconsolidation of Nippon Trust
 Bank.......................................             --              --         (57,502)             --              --
                                             --------------  --------------  --------------  --------------  --------------
Allowance for credit losses at end of fiscal
 year....................................... (Yen)1,137,181  (Yen)1,385,010  (Yen)1,341,608  (Yen)1,058,633  (Yen)1,058,633
                                             ==============  ==============  ==============  ==============  ==============
Allowance for credit losses applicable to
 foreign activities:
   Balance at beginning of fiscal year...... (Yen)  253,619  (Yen)  156,576  (Yen)  198,820  (Yen)  224,830  (Yen)  224,830
                                             ==============  ==============  ==============  ==============  ==============
   Balance at end of fiscal year............ (Yen)  156,576  (Yen)  198,820  (Yen)  224,830  (Yen)  226,612  (Yen)  226,612
                                             ==============  ==============  ==============  ==============  ==============
   Provision (credit) for credit losses..... (Yen)   10,344  (Yen)   89,859  (Yen)  110,898  (Yen)  112,761  (Yen)  112,761
                                             ==============  ==============  ==============  ==============  ==============
Ratio of net charge-offs during the fiscal
 year to average loans outstanding during
 the fiscal year............................          1.17 %           1.10%          1.18 %          1.41 %          1.41 %
</TABLE>
<TABLE>
<CAPTION>

                                             -------------------------------
                                                            2004
                                             ------------------------------
                                                  Old               New
                                             classification    classification
                                             --------------  --------------

<S>                                          <C>             <C>
Allowance for credit losses at beginning of
 fiscal year................................ (Yen)1,058,633  (Yen)1,058,633
                                             --------------  --------------
Provision (credit) for credit losses........       (142,362)       (142,362)
                                             --------------  --------------
Charge-offs:
   Domestic:
      Manufacturing.........................         17,224          17,142
      Construction..........................         31,226          31,226
      Real estate...........................         46,975          46,975
      Services..............................         13,646          14,274
      Wholesale and retail..................         42,115          39,387
      Banks and other financial
       institutions.........................          1,123           1,123
      Communication and information
       services.............................             --           2,256
      Other industries......................          5,978           5,904
      Consumer..............................         48,620          48,620/(2)/
                                             --------------  --------------
   Total domestic...........................        206,907         206,907
                                             --------------  --------------
   Total foreign............................         70,806          70,876
                                             --------------  --------------
      Total.................................        277,713         277,713
                                             --------------  --------------
Recoveries:
   Domestic.................................         11,337          11,337
   Foreign..................................         18,699          18,699
                                             --------------  --------------
      Total.................................         30,036          30,036
                                             --------------  --------------
Net charge-offs.............................        247,677         247,677
                                             --------------  --------------
Others/(1)/.................................        (19,248)        (19,248)
                                             --------------  --------------
The deconsolidation of Nippon Trust
 Bank.......................................             --              --
                                             --------------  --------------
Allowance for credit losses at end of fiscal
 year....................................... (Yen)  649,346  (Yen)  649,346
                                             ==============  ==============
Allowance for credit losses applicable to
 foreign activities:
   Balance at beginning of fiscal year...... (Yen)  226,612  (Yen)  226,612
                                             ==============  ==============
   Balance at end of fiscal year............ (Yen)  194,714  (Yen)  194,714
                                             ==============  ==============
   Provision (credit) for credit losses..... (Yen)   32,304  (Yen)   32,304
                                             ==============  ==============
Ratio of net charge-offs during the fiscal
 year to average loans outstanding during
 the fiscal year............................          0.61 %          0.61 %
</TABLE>
--------
Notes:
(1)Others primarily include foreign exchange translation and discontinued
   operations adjustments.

                                     A-14

<PAGE>

(2)Charge-offs of domestic loans within the "consumer" category in the above
   table include charge-offs of loans to individuals who utilize our loan
   proceeds to finance their proprietor activities and not for their personal
   financing needs. During the fiscal year ended March 31, 2004, our credit
   administration system was upgraded and we are now able to present a precise
   breakdown of charge-offs of such consumer loans for the fiscal year ended
   March 31, 2004 by the type of proprietor business. This breakdown is
   presented below in accordance with our new classification:

<TABLE>
<CAPTION>
                                                             Banks and   Communication              Total
                                                               other          and                  included
                              Real               Wholesale   financial    information    Other        in
Manufacturing Construction   estate    Services  and retail institutions   services    industries  Consumer
------------- ------------ ---------- ---------- ---------- ------------ ------------- ---------- -----------
                                                (in millions)
<S>           <C>          <C>        <C>        <C>        <C>          <C>           <C>        <C>
   (Yen)39         --      (Yen)9,481 (Yen)2,270  (Yen)486       --           --        (Yen)108  (Yen)12,384
</TABLE>

   Since the system upgrade was effective during the fiscal year ended March
   31, 2004, no equivalent information is obtainable for prior fiscal years.

                                     A-15

<PAGE>

The following table shows an allocation of our allowance for credit losses at
March 31 of each of the five fiscal years ended March 31, 2004:

<TABLE>
<CAPTION>

                               --------------  -------- --------------  -------- --------------  --------
                                         2000                     2001                     2002
                               -----------------------  -----------------------  -----------------------
                                         Old                      Old                      Old
                                    Classification           Classification           Classification
                               -----------------------  -----------------------  -----------------------
                                                 % of                     % of                     % of
                                               loans in                 loans in                 loans in
                                                 each                     each                     each
                                               category                 category                 category
                                               to total                 to total                 to total
                                   Amount       loans       Amount       loans       Amount       loans
                               --------------  -------- --------------  -------- --------------  --------

<S>                            <C>             <C>      <C>             <C>      <C>             <C>
Domestic:
 Manufacturing................ (Yen)   88,424    13.65% (Yen)  141,871    13.01% (Yen)  138,706    12.38%
 Construction.................         63,044     3.56          93,767     3.48         106,573     2.98
 Real estate..................        298,817     9.02         374,555     9.89         367,315     8.81
 Services.....................        123,756     9.30         132,256     9.28         124,118     8.76
 Wholesale and retail.........        199,184    14.53         187,731    14.19         198,223    12.53
 Banks and other financial
  institutions................         34,407     5.35          55,350     5.01          36,940     5.36
 Communication and
  information services........             --       --              --       --              --       --
 Other industries.............         53,402     7.70          37,725     3.95          37,132     6.78
 Consumer.....................        102,966    16.77         104,775    16.56          85,141    16.29
Foreign:
 Governments and official
  institutions................         13,668     0.54          16,868     0.74          32,925     0.75
 Banks and other financial
  institutions................          6,828     1.18           8,156     1.45           6,668     1.20
 Commercial and industrial....        117,340    17.06         161,628    20.44         176,265    22.58
 Other........................         18,740     1.34          12,168     2.00           8,972     1.58
Unallocated...................         16,605       --          58,160       --          22,630       --
                               --------------   ------  --------------   ------  --------------   ------
  Total....................... (Yen)1,137,181   100.00% (Yen)1,385,010   100.00% (Yen)1,341,608   100.00%
                               ==============   ======  ==============   ======  ==============   ======
Allowance as a percentage of
 loans........................          2.78 %                   3.45 %                   3.27 %
Allowance as a percentage of
 nonaccrual and restructured
 loans and accruing loans
 contractually past due 90
 days or more.................         59.15 %                  40.19 %                  41.35 %
</TABLE>
<TABLE>
<CAPTION>
                                     At March 31,
                               ------------------------ --------------  -------- ------------  -------- ------------  --------
                                                     2003                                            2004
                               ------------------------------------------------  --------------------------------------------
                                         Old                      New                     Old                    New
                                    Classification           Classification          Classification         Classification
                               -----------------------  -----------------------  ---------------------  ---------------------
                                                 % of                     % of                   % of                   % of
                                               loans in                 loans in               loans in               loans in
                                                 each                     each                   each                   each
                                               category                 category               category               category
                                               to total                 to total               to total               to total
                                   Amount       loans       Amount       loans      Amount      loans      Amount      loans
                               --------------  -------- --------------  -------- ------------  -------- ------------  --------
                               (in millions, except percentages)
<S>                            <C>             <C>      <C>             <C>      <C>           <C>      <C>           <C>
Domestic:
 Manufacturing................ (Yen)  112,713    11.97% (Yen)  111,089    11.78% (Yen) 72,977    11.90% (Yen) 72,552    11.75%
 Construction.................         54,497     2.49          54,497     2.49        15,174     2.08        15,174     2.08
 Real estate..................        181,780     8.11         181,780     8.11        90,667     8.80        90,667     8.80
 Services.....................         96,428    10.75         100,968    10.61        41,518     9.76        44,737     9.16
 Wholesale and retail.........        173,787    12.19         163,546    11.80        83,000    11.13        75,961    10.79
 Banks and other financial
  institutions................         37,648     4.50          37,648     4.50        19,301     4.42        19,301     4.42
 Communication and
  information services........             --       --          18,331     3.16            --       --         5,927     1.63
 Other industries.............         57,299     9.04          46,293     6.60        31,900    12.43        30,218    11.89
 Consumer.....................         94,559    17.47          94,559    17.47        81,567    18.70        81,567*   18.70
Foreign:
 Governments and official
  institutions................          2,227     0.57           2,227     0.57         1,122     0.45         1,122     0.45
 Banks and other financial
  institutions................          5,275     1.94           5,275     1.94        58,198     2.26        58,198     2.26
 Commercial and industrial....        202,642    20.30         202,642    20.30       129,004    17.68       129,004    17.68
 Other........................         16,468     0.67          16,468     0.67         6,390     0.39         6,390     0.39
Unallocated...................         23,310       --          23,310       --        18,528       --        18,528       --
                               --------------   ------  --------------   ------  ------------   ------  ------------   ------
  Total....................... (Yen)1,058,633   100.00% (Yen)1,058,633   100.00% (Yen)649,346   100.00% (Yen)649,346   100.00%
                               ==============   ======  ==============   ======  ============   ======  ============   ======
Allowance as a percentage of
 loans........................          2.65 %                   2.65 %                  1.63%                  1.63%
Allowance as a percentage of
 nonaccrual and restructured
 loans and accruing loans
 contractually past due 90
 days or more.................         50.04 %                  50.04 %                 52.82%                 52.82%
</TABLE>
--------
  *The credit loss allowance for domestic loans within the "consumer" category
   in the above table include the credit loss allowance for loans to
   individuals who utilize loan proceeds to finance their proprietor activities
   and not for their personal financing needs. During the fiscal year ended
   March 31, 2004, our credit administration system was upgraded and we are now
   able to present a precise breakdown of the balance of the credit loss
   allowance for such consumer loans at March 31, 2004 by the type of
   proprietor business. This breakdown is presented below in accordance with
   our new classification:

<TABLE>
<CAPTION>
                                                             Banks and   Communication              Total
                                                               other          and                  included
                              Real               Wholesale   financial    information    Other        in
Manufacturing Construction   estate    Services  and retail institutions   services    industries  Consumer
------------- ------------ ---------- ---------- ---------- ------------ ------------- ---------- -----------
                                                (in millions)
<S>           <C>          <C>        <C>        <C>        <C>          <C>           <C>        <C>
  (Yen)292      (Yen)196   (Yen)7,671 (Yen)2,371  (Yen)554    (Yen)13       (Yen)42     (Yen)104  (Yen)11,243
</TABLE>

   Since the system upgrade was effective during the fiscal year ended March
   31, 2004, no equivalent information is obtainable for prior fiscal year-end
   dates.

                                     A-16

<PAGE>

While the allowance for credit losses contains amounts allocated to components
of specifically identified loans as well as a group on portfolio of loans, the
allowance for credit losses is available for credit losses in the entire loan
portfolio and the allocations shown above are not intended to be restricted to
the specific loan category. Accordingly, as the evaluation of credit risks
changes, allocations of the allowance will be changed to reflect current
conditions and various other factors.

V. Deposits

The following table shows the average amount of, and the average rate paid on,
the following deposit categories for the fiscal years ended March 31, 2002,
2003 and 2004:

<TABLE>
<CAPTION>
                                                             Fiscal years ended March 31,
                                        ----------------------------------------------------------------------
                                                 2002                    2003                    2004
                                        ----------------------  ----------------------  ----------------------
                                            Average     Average     Average     Average     Average     Average
                                            amount       rate       amount       rate       amount       rate
                                        --------------- ------- --------------- ------- --------------- -------
                                                           (in millions, except percentages)
<S>                                     <C>             <C>     <C>             <C>     <C>             <C>
Domestic offices:
   Non-interest-bearing demand
     deposits.......................... (Yen) 2,514,723    --   (Yen) 3,318,708    --   (Yen) 4,446,701    --
   Interest-bearing demand
     deposits..........................      13,700,471  0.04%       20,005,618  0.02%       22,332,657  0.02%
   Deposits at notice..................       1,635,102  1.12         1,377,800  0.82         1,579,007  0.64
   Time deposits.......................      17,977,211  0.42        16,525,519  0.24        16,104,461  0.16
   Certificates of deposit.............       1,228,200  0.19         1,667,097  0.02         1,838,599  0.01
Foreign offices, principally from banks
  located in foreign countries:
   Non-interest-bearing demand
     deposits..........................       1,649,994    --         2,050,597    --         2,317,658    --
   Interest-bearing deposits,
     principally time deposits and
     certificates of deposit...........       9,717,893  2.95         8,000,966  1.73         8,171,037  1.28
                                        ---------------         ---------------         ---------------
       Total........................... (Yen)48,423,594         (Yen)52,946,305         (Yen)56,790,120
                                        ===============         ===============         ===============
</TABLE>

Deposits at notice represent interest-bearing demand deposits which require the
depositor to give two or more days notice in advance to withdrawal.

The average amounts of total deposits by foreign depositors included in
domestic offices for the fiscal years ended March 31, 2002, 2003 and 2004 were
(Yen)479,895 million, (Yen)665,349 million and (Yen)944,520 million,
respectively.

                                     A-17

<PAGE>

At March 31, 2004, the balance and remaining maturities of time deposits and
certificates of deposit issued by domestic offices in amounts of (Yen)10
million (approximately US$96 thousand at the Federal Reserve Bank of New York's
noon buying rate on March 31, 2004) or more and total foreign deposits issued
in amounts of US$100,000 or more are shown in the following table.

<TABLE>
<CAPTION>
                                               Time       Certificates
                                             deposits      of deposit        Total
                                          -------------- -------------- ---------------
                                                          (in millions)
<S>                                       <C>            <C>            <C>
Domestic offices:
   Three months or less.................. (Yen)5,233,694 (Yen)1,133,355 (Yen) 6,367,049
   Over three months through six months..      1,646,800         58,726       1,705,526
   Over six months through twelve months.      1,721,359        113,813       1,835,172
   Over twelve months....................        796,910         10,000         806,910
                                          -------------- -------------- ---------------
       Total............................. (Yen)9,398,763 (Yen)1,315,894 (Yen)10,714,657
                                          ============== ============== ===============
Foreign offices..........................                               (Yen) 6,363,946
                                                                        ===============
</TABLE>

VI. Short-Term Borrowings

The following table shows certain additional information with respect to our
short-term borrowings for the fiscal years ended March 31, 2002, 2003 and 2004:

<TABLE>
<CAPTION>
                                                                         Fiscal years ended March 31,
                                                               -----------------------------------------------
                                                                    2002             2003            2004
                                                               --------------  ---------------  --------------
                                                                      (in millions, except percentages)
<S>                                                            <C>             <C>              <C>
Call money, funds purchased, and payables under repurchase
  agreements and securities lending transactions:
   Average balance outstanding during the fiscal year......... (Yen)7,791,128  (Yen) 6,346,192  (Yen)7,559,245
   Maximum balance outstanding at any month-end during the
     fiscal year..............................................      9,622,825       15,521,522       9,060,163
   Balance at end of fiscal year..............................      8,060,987        6,901,929       6,815,125
   Weighted average interest rate during the fiscal year......          2.12 %           1.11 %          0.64 %
   Weighted average interest rate on balance at end of fiscal
     year.....................................................          0.74 %           0.93 %          0.52 %
Other short-term borrowings:
   Average balance outstanding during the fiscal year......... (Yen)1,513,635  (Yen) 1,521,078  (Yen)2,745,530
   Maximum balance outstanding at any month-end during the
     fiscal year..............................................      2,517,923        1,790,728       4,379,446
   Balance at end of fiscal year..............................      2,313,132        1,542,609       4,379,446
   Weighted average interest rate during the fiscal year......          2.87 %           1.74 %          0.49 %
   Weighted average interest rate on balance at end of fiscal
     year.....................................................          1.38 %           0.76 %          0.13 %
</TABLE>

                                     A-18

<PAGE>

                  INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                                                    Page
                                                                                                    ----
<S>                                                                                                 <C>
Report of Independent Registered Public Accounting Firm............................................ F-2
Consolidated Balance Sheets as of March 31, 2003 and 2004.......................................... F-3
Consolidated Statements of Operations for the Fiscal Years ended March 31, 2002, 2003 and 2004..... F-4
Consolidated Statements of Changes in Equity from Nonowner Sources for the Fiscal Years ended
  March 31, 2002, 2003 and 2004.................................................................... F-5
Consolidated Statements of Shareholder's Equity for the Fiscal Years ended March 31, 2002, 2003 and
  2004............................................................................................. F-6
Consolidated Statements of Cash Flows for the Fiscal Years ended March 31, 2002, 2003 and 2004..... F-7
Notes to Consolidated Financial Statements......................................................... F-8
</TABLE>

                                      F-1

<PAGE>

            REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Bank of Tokyo-Mitsubishi, Ltd.
(Kabushiki Kaisha Tokyo Mitsubishi Ginko):

We have audited the accompanying consolidated balance sheets of The Bank of
Tokyo-Mitsubishi, Ltd. (Kabushiki Kaisha Tokyo Mitsubishi Ginko) ("the Bank")
(a wholly owned subsidiary of Mitsubishi Tokyo Financial Group, Inc.), and
subsidiaries as of March 31, 2003 and 2004, and the related consolidated
statements of operations, changes in equity from nonowner sources,
shareholder's equity, and cash flows for each of the three years in the period
ended March 31, 2004 (all expressed in Japanese yen). These financial
statements are the responsibility of the Bank's management. Our responsibility
is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of the Bank and subsidiaries at March
31, 2003 and 2004, and the results of their operations and their cash flows for
each of the three years in the period ended March 31, 2004, in conformity with
accounting principles generally accepted in the United States of America.

As discussed in Note 1 to the consolidated financial statements, the Bank
changed its method of accounting for derivative financial instruments and
hedging activities in the fiscal year ended March 31, 2002, and its method of
accounting for goodwill and other intangible assets in the fiscal year ended
March 31, 2003.

/s/ DELOITTE TOUCHE TOHMATSU
DELOITTE TOUCHE TOHMATSU

Tokyo, Japan
September 22, 2004

                                      F-2

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS
                            MARCH 31, 2003 AND 2004

<TABLE>
<CAPTION>
                                                                   2003             2004
                                                             ---------------  ---------------
                                                                       (in millions)
<S>                                                          <C>              <C>
                          ASSETS
Cash and due from banks (Note 10)........................... (Yen) 3,764,779  (Yen) 2,764,182
Interest-earning deposits in other banks (Note 10)..........       3,651,541        3,185,696
Call loans and funds sold (Note 13).........................         712,403          972,613
Receivables under resale agreements.........................         628,713        1,478,497
Receivables under securities borrowing transactions.........       1,568,477        4,615,515
Trading account assets (including assets pledged that
 secured parties are permitted to sell or repledge of
 (Yen)1,739,824 million in 2003 and (Yen)2,219,093 million
 in 2004) (Notes 3 and 10)..................................       7,882,009        8,037,863
Investment securities (Notes 4 and 10):
 Securities available for sale--carried at estimated fair
  value (including assets pledged that secured parties are
  permitted to sell or repledge of (Yen)1,323,095 million
  in 2003 and (Yen)922,894 million in 2004).................      16,801,126       20,286,766
 Securities being held to maturity--carried at amortized
  cost (estimated fair value of (Yen)1,052,662 million in
  2004).....................................................              --        1,052,193
 Other investment securities................................         113,054          160,343
                                                             ---------------  ---------------
  Total investment securities...............................      16,914,180       21,499,302
                                                             ---------------  ---------------
Loans, net of unearned income and deferred loan fees
 (including assets pledged that secured parties are
 permitted to sell or repledge of (Yen)626,812 million in
 2003 and (Yen)683,068 million in 2004) (Notes 5 and 10)....      39,992,377       39,931,042
Allowance for credit losses (Notes 5 and 6).................      (1,058,633)        (649,346)
                                                             ---------------  ---------------
 Net loans..................................................      38,933,744       39,281,696
                                                             ---------------  ---------------
Premises and equipment--net (Note 7)........................         485,565          434,523
Accrued interest............................................         112,540           93,596
Customers' acceptance liability.............................          28,261           30,149
Intangible assets (Note 8)..................................         147,707          198,306
Goodwill (Note 8)...........................................          18,433           26,910
Deferred tax assets (Note 9)................................       1,311,081          747,822
Other assets (Notes 5 and 16)...............................       1,520,954        1,691,882
                                                             ---------------  ---------------
    Total................................................... (Yen)77,680,387  (Yen)85,058,552
                                                             ===============  ===============
           LIABILITIES AND SHAREHOLDER'S EQUITY
Deposits (Note 10 and 11):
 Domestic offices:
  Non-interest-bearing...................................... (Yen) 3,818,311  (Yen) 4,933,248
  Interest-bearing..........................................      41,358,264       41,794,074
 Overseas offices:
  Non-interest-bearing......................................       2,432,307        2,408,796
  Interest-bearing..........................................       7,658,495        9,402,876
                                                             ---------------  ---------------
    Total deposits..........................................      55,267,377       58,538,994
Debentures (Note 12)........................................         636,060          265,957
Call money and funds purchased (Notes 10 and 13)............       2,436,308        2,638,298
Payables under repurchase agreements (Note 10)..............       2,469,406        2,739,396
Payables under securities lending transactions (Note 10)....       1,996,215        1,437,431
Other short-term borrowings (Notes 10 and 14)...............       1,542,609        4,379,446
Trading account liabilities (Note 3)........................       3,335,704        2,403,449
Obligations to return securities received as collateral.....         929,368        2,295,778
Bank acceptances outstanding................................          28,261           30,149
Accrued interest............................................          84,580           70,560
Long-term debt (Notes 10 and 14)............................       4,607,359        5,086,993
Other liabilities (Notes 9, 15 and 16)......................       2,411,397        2,399,968
                                                             ---------------  ---------------
    Total liabilities.......................................      75,744,644       82,286,419
                                                             ---------------  ---------------
Commitments and contingent liabilities (Notes 23 and 25)
Shareholder's equity (Note 20):
 Capital stock (Notes 17 and 18) :
  Preferred stock--authorized, 100,000,000 shares; issued
    and outstanding, 81,400,000 shares in 2003 and 2004,
    with no stated value (aggregate liquidation preference
    of (Yen)244,200 million)................................         122,100          122,100
  Common stock--authorized, 8,000,000,000 shares; issued,
    5,019,469,546 shares in 2003 and in 2004, with no
    stated value............................................         749,873          749,873
 Capital surplus (Note 18)..................................         815,192          814,583
 Retained earnings (Notes 19 and 32):
  Appropriated for legal reserve............................         190,045          190,045
  Unappropriated............................................         244,187          696,985
 Accumulated other changes in equity from nonowner sources,
  net of taxes..............................................        (183,879)         199,270
                                                             ---------------  ---------------
  Total.....................................................       1,937,518        2,772,856
  Less parent company's stock, at cost--1,469 common shares
    in 2003 and 609 common shares in 2004...................           1,775              723
                                                             ---------------  ---------------
  Shareholder's equity--net.................................       1,935,743        2,772,133
                                                             ---------------  ---------------
    Total................................................... (Yen)77,680,387  (Yen)85,058,552
                                                             ===============  ===============
</TABLE>

       See the accompanying notes to Consolidated Financial Statements.

                                      F-3

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF OPERATIONS
           FOR THE FISCAL YEARS ENDED MARCH 31, 2002, 2003 AND 2004

<TABLE>
<CAPTION>
                                                                                                             2002
                                                                                                        --------------

<S>                                                                                                     <C>
Interest income:
Loans, including fees (Note 5)......................................................................... (Yen)1,113,611
Deposits in other banks................................................................................        152,523
Investment securities:
   Interest............................................................................................        205,694
   Dividends...........................................................................................         43,204
Trading account assets.................................................................................         12,477
Call loans and funds sold..............................................................................         20,393
Receivables under resale agreements and securities borrowing transactions..............................        120,149
                                                                                                        --------------
     Total.............................................................................................      1,668,051
                                                                                                        --------------
Interest expense:
Deposits...............................................................................................        388,673
Debentures.............................................................................................         20,596
Call money and funds purchased.........................................................................         14,983
Payables under repurchase agreements and securities lending transactions...............................        150,321
Other short-term borrowings and trading account liabilities............................................         43,962
Long-term debt.........................................................................................        163,781
                                                                                                        --------------
     Total.............................................................................................        782,316
                                                                                                        --------------
Net interest income....................................................................................        885,735
Provision (credit) for credit losses (Notes 5 and 6)...................................................        466,947
                                                                                                        --------------
Net interest income after provision (credit) for credit losses.........................................        418,788
                                                                                                        --------------
Non-interest income:
Fees and commissions (Note 26).........................................................................        335,919
Foreign exchange gains (losses)--net (Note 3)..........................................................       (184,523)
Trading account profits--net (Note 3)..................................................................        111,075
Investment securities gains--net (Note 4)..............................................................         11,675
Refund of the local taxes by the Tokyo Metropolitan Government (Note 9)................................             --
Other non-interest income..............................................................................         38,905
                                                                                                        --------------
     Total.............................................................................................        313,051
                                                                                                        --------------
Non-interest expense:
Salaries and employee benefits (Note 15)...............................................................        363,434
Occupancy expenses--net (Notes 7 and 25)...............................................................        102,333
Losses (gains) on other real estate owned..............................................................          4,998
Goodwill amortization (Note 8).........................................................................          4,556
Fees and commission expense............................................................................         66,490
Amortization of intangible assets (Note 8).............................................................         28,884
Minority interest in income of consolidated subsidiaries...............................................         22,912
Insurance premiums, including deposit insurance........................................................         33,596
Communications.........................................................................................         18,911
Other non-interest expenses............................................................................        302,055
                                                                                                        --------------
     Total.............................................................................................        948,169
                                                                                                        --------------
Income (loss) from continuing operations before income tax expense (benefit) and cumulative effect of a
 change in accounting principle........................................................................       (216,330)
Income tax expense (benefit) (Note 9)..................................................................        (76,557)
                                                                                                        --------------
Income (loss) from continuing operations before cumulative effect of a change in accounting principle..       (139,773)
Income (loss) from discontinued operations--net (Note 2)...............................................          1,235
                                                                                                        --------------
Cumulative effect of a change in accounting principle, net of tax (Note 1).............................          5,867
                                                                                                        --------------
Net income (loss)...................................................................................... (Yen) (132,671)
                                                                                                        ==============
Income allocable to a preferred shareholder............................................................ (Yen)    6,716
                                                                                                        --------------
Net income (loss) available to a common shareholder.................................................... (Yen) (139,387)
                                                                                                        ==============


Amounts per share (Note 21):
Basic earnings (loss) per common share--income (loss) from continuing operations available to a common
 shareholder before cumulative effect of a change in accounting principle.............................. (Yen)   (31.33)
Basic earnings (loss) per common share--net income (loss) available to a common shareholder............         (29.82)
Diluted earnings (loss) per common share--income (loss) from continuing operations available to a
 common shareholder before cumulative effect of a change in accounting principle.......................         (31.33)
Diluted earnings (loss) per common share--net income (loss) available to a common shareholder..........         (29.82)
</TABLE>
<TABLE>
<CAPTION>
                                                                                                             2003
                                                                                                        --------------
                                                                                                          (in millions)
<S>                                                                                                     <C>
Interest income:
Loans, including fees (Note 5)......................................................................... (Yen)  916,802
Deposits in other banks................................................................................         66,979
Investment securities:
   Interest............................................................................................        190,818
   Dividends...........................................................................................         32,077
Trading account assets.................................................................................         11,215
Call loans and funds sold..............................................................................          9,593
Receivables under resale agreements and securities borrowing transactions..............................         33,183
                                                                                                        --------------
     Total.............................................................................................      1,260,667
                                                                                                        --------------
Interest expense:
Deposits...............................................................................................        193,594
Debentures.............................................................................................          8,508
Call money and funds purchased.........................................................................          7,303
Payables under repurchase agreements and securities lending transactions...............................         63,027
Other short-term borrowings and trading account liabilities............................................         29,453
Long-term debt.........................................................................................        133,198
                                                                                                        --------------
     Total.............................................................................................        435,083
                                                                                                        --------------
Net interest income....................................................................................        825,584
Provision (credit) for credit losses (Notes 5 and 6)...................................................        287,282
                                                                                                        --------------
Net interest income after provision (credit) for credit losses.........................................        538,302
                                                                                                        --------------
Non-interest income:
Fees and commissions (Note 26).........................................................................        384,377
Foreign exchange gains (losses)--net (Note 3)..........................................................           (578)
Trading account profits--net (Note 3)..................................................................        273,723
Investment securities gains--net (Note 4)..............................................................         33,847
Refund of the local taxes by the Tokyo Metropolitan Government (Note 9)................................             --
Other non-interest income..............................................................................         33,241
                                                                                                        --------------
     Total.............................................................................................        724,610
                                                                                                        --------------
Non-interest expense:
Salaries and employee benefits (Note 15)...............................................................        397,814
Occupancy expenses--net (Notes 7 and 25)...............................................................         88,881
Losses (gains) on other real estate owned..............................................................             98
Goodwill amortization (Note 8).........................................................................             --
Fees and commission expense............................................................................         70,302
Amortization of intangible assets (Note 8).............................................................         38,669
Minority interest in income of consolidated subsidiaries...............................................          6,025
Insurance premiums, including deposit insurance........................................................         38,806
Communications.........................................................................................         19,638
Other non-interest expenses............................................................................        313,104
                                                                                                        --------------
     Total.............................................................................................        973,337
                                                                                                        --------------
Income (loss) from continuing operations before income tax expense (benefit) and cumulative effect of a
 change in accounting principle........................................................................        289,575
Income tax expense (benefit) (Note 9)..................................................................         50,435
                                                                                                        --------------
Income (loss) from continuing operations before cumulative effect of a change in accounting principle..        239,140
Income (loss) from discontinued operations--net (Note 2)...............................................         10,370
                                                                                                        --------------
Cumulative effect of a change in accounting principle, net of tax (Note 1).............................           (532)
                                                                                                        --------------
Net income (loss)......................................................................................        248,978
                                                                                                        ==============
Income allocable to a preferred shareholder............................................................ (Yen)    3,358
                                                                                                        --------------
Net income (loss) available to a common shareholder.................................................... (Yen)  245,620
                                                                                                        ==============

                                                                                                            (in Yen)
Amounts per share (Note 21):
Basic earnings (loss) per common share--income (loss) from continuing operations available to a common
 shareholder before cumulative effect of a change in accounting principle.............................. (Yen)    50.39
Basic earnings (loss) per common share--net income (loss) available to a common shareholder............          52.49
Diluted earnings (loss) per common share--income (loss) from continuing operations available to a
 common shareholder before cumulative effect of a change in accounting principle.......................          47.05
Diluted earnings (loss) per common share--net income (loss) available to a common shareholder..........          49.11
</TABLE>
<TABLE>
<CAPTION>
                                                                                                             2004
                                                                                                        --------------

<S>                                                                                                     <C>
Interest income:
Loans, including fees (Note 5)......................................................................... (Yen)  810,001
Deposits in other banks................................................................................         43,470
Investment securities:
   Interest............................................................................................        178,937
   Dividends...........................................................................................         30,642
Trading account assets.................................................................................         28,015
Call loans and funds sold..............................................................................          6,297
Receivables under resale agreements and securities borrowing transactions..............................         22,790
                                                                                                        --------------
     Total.............................................................................................      1,120,152
                                                                                                        --------------
Interest expense:
Deposits...............................................................................................        144,450
Debentures.............................................................................................          4,035
Call money and funds purchased.........................................................................          5,434
Payables under repurchase agreements and securities lending transactions...............................         42,738
Other short-term borrowings and trading account liabilities............................................         32,965
Long-term debt.........................................................................................        109,274
                                                                                                        --------------
     Total.............................................................................................        338,896
                                                                                                        --------------
Net interest income....................................................................................        781,256
Provision (credit) for credit losses (Notes 5 and 6)...................................................       (142,362)
                                                                                                        --------------
Net interest income after provision (credit) for credit losses.........................................        923,618
                                                                                                        --------------
Non-interest income:
Fees and commissions (Note 26).........................................................................        440,887
Foreign exchange gains (losses)--net (Note 3)..........................................................        247,417
Trading account profits--net (Note 3)..................................................................        117,272
Investment securities gains--net (Note 4)..............................................................         97,763
Refund of the local taxes by the Tokyo Metropolitan Government (Note 9)................................         32,141
Other non-interest income..............................................................................         47,639
                                                                                                        --------------
     Total.............................................................................................        983,119
                                                                                                        --------------
Non-interest expense:
Salaries and employee benefits (Note 15)...............................................................        412,516
Occupancy expenses--net (Notes 7 and 25)...............................................................         86,566
Losses (gains) on other real estate owned..............................................................           (579)
Goodwill amortization (Note 8).........................................................................             --
Fees and commission expense............................................................................         68,931
Amortization of intangible assets (Note 8).............................................................         54,216
Minority interest in income of consolidated subsidiaries...............................................         45,824
Insurance premiums, including deposit insurance........................................................         45,125
Communications.........................................................................................         25,462
Other non-interest expenses............................................................................        296,878
                                                                                                        --------------
     Total.............................................................................................      1,034,939
                                                                                                        --------------
Income (loss) from continuing operations before income tax expense (benefit) and cumulative effect of a
 change in accounting principle........................................................................        871,798
Income tax expense (benefit) (Note 9)..................................................................        333,612
                                                                                                        --------------
Income (loss) from continuing operations before cumulative effect of a change in accounting principle..        538,186
Income (loss) from discontinued operations--net (Note 2)...............................................           (585)
                                                                                                        --------------
Cumulative effect of a change in accounting principle, net of tax (Note 1).............................             --
                                                                                                        --------------
Net income (loss)......................................................................................        537,601
                                                                                                        ==============
Income allocable to a preferred shareholder............................................................ (Yen)   10,073
                                                                                                        --------------
Net income (loss) available to a common shareholder.................................................... (Yen)  527,528
                                                                                                        ==============


Amounts per share (Note 21):
Basic earnings (loss) per common share--income (loss) from continuing operations available to a common
 shareholder before cumulative effect of a change in accounting principle.............................. (Yen)   105.22
Basic earnings (loss) per common share--net income (loss) available to a common shareholder............         105.10
Diluted earnings (loss) per common share--income (loss) from continuing operations available to a
 common shareholder before cumulative effect of a change in accounting principle.......................         104.93
Diluted earnings (loss) per common share--net income (loss) available to a common shareholder..........         104.81
</TABLE>

       See the accompanying notes to Consolidated Financial Statements.

                                      F-4

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

      CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FROM NONOWNER SOURCES
           FOR THE FISCAL YEARS ENDED MARCH 31, 2002, 2003 AND 2004

<TABLE>
<CAPTION>
                                                                                 Gains (Losses)                Gains (Losses)
                                                                                 before income    Income tax   net of income
                                                                                  tax expense     (expense)     tax expense
                                                                                   (benefit)       benefit       (benefit)
                                                                                 -------------- -------------  --------------
                                                                                                (in millions)
<S>                                                                              <C>            <C>            <C>
Fiscal year ended March 31, 2002:
Net loss........................................................................                               (Yen)(132,671)
                                                                                                               -------------
Other changes in equity from nonowner sources:
    Net unrealized holding losses on investment securities available for sale... (Yen)(428,924) (Yen) 163,588       (265,336)
    Reclassification adjustment for gains included in net loss..................       (41,572)        15,729        (25,843)
                                                                                 -------------  -------------  -------------
       Total....................................................................      (470,496)       179,317       (291,179)
                                                                                 -------------  -------------  -------------
    Cumulative effect of a change in accounting principle.......................         2,065           (808)         1,257
    Net unrealized gains on derivatives qualifying for cash flow hedges.........         7,982         (2,916)         5,066
    Reclassification adjustment for gains included in net loss..................        (4,254)         1,627         (2,627)
                                                                                 -------------  -------------  -------------
       Total....................................................................         5,793         (2,097)         3,696
                                                                                 -------------  -------------  -------------
    Minimum pension liability adjustments.......................................       (94,096)        35,750        (58,346)
                                                                                 -------------  -------------  -------------
    Foreign currency translation adjustments....................................        74,511         (4,714)        69,797
    Reclassification adjustment for losses included in net loss.................           115             --            115
                                                                                 -------------  -------------  -------------
       Total....................................................................        74,626         (4,714)        69,912
                                                                                 -------------  -------------  -------------
Total changes in equity from nonowner sources...................................                               (Yen)(408,588)
                                                                                                               =============
Fiscal year ended March 31, 2003:
Net income......................................................................                               (Yen) 248,978
                                                                                                               -------------
Other changes in equity from nonowner sources:
    Net unrealized holding losses on investment securities available for sale... (Yen)(635,074) (Yen) 238,071       (397,003)
    Reclassification adjustment for gains included in net income................       (46,805)        18,312        (28,493)
                                                                                 -------------  -------------  -------------
       Total....................................................................      (681,879)       256,383       (425,496)
                                                                                 -------------  -------------  -------------
    Net unrealized gains on derivatives qualifying for cash flow hedges.........        10,885         (4,164)         6,721
    Reclassification adjustment for gains included in net income................        (9,545)         3,651         (5,894)
                                                                                 -------------  -------------  -------------
       Total....................................................................         1,340           (513)           827
                                                                                 -------------  -------------  -------------
    Minimum pension liability adjustments.......................................       (94,202)        34,295        (59,907)
                                                                                 -------------  -------------  -------------
    Foreign currency translation adjustments....................................       (47,780)         3,299        (44,481)
    Reclassification adjustment for losses included in net income...............           394             --            394
                                                                                 -------------  -------------  -------------
       Total....................................................................       (47,386)         3,299        (44,087)
                                                                                 -------------  -------------  -------------
Total changes in equity from nonowner sources...................................                               (Yen)(279,685)
                                                                                                               =============
Fiscal year ended March 31, 2004:
Net income......................................................................                               (Yen) 537,601
                                                                                                               -------------
Other changes in equity from nonowner sources:
    Net unrealized holding gains on investment securities available for sale.... (Yen) 728,156  (Yen)(300,144)       428,012
    Reclassification adjustment for gains included in net income................      (115,013)        48,013        (67,000)
                                                                                 -------------  -------------  -------------
       Total....................................................................       613,143       (252,131)       361,012
                                                                                 -------------  -------------  -------------
    Net unrealized gains on derivatives qualifying for cash flow hedges.........         4,286         (1,740)         2,546
    Reclassification adjustment for gains included in net income................        (9,227)         3,529         (5,698)
                                                                                 -------------  -------------  -------------
       Total....................................................................        (4,941)         1,789         (3,152)
                                                                                 -------------  -------------  -------------
    Minimum pension liability adjustments.......................................        78,641        (30,804)        47,837
                                                                                 -------------  -------------  -------------
    Foreign currency translation adjustments....................................       (35,498)         4,324        (31,174)
    Reclassification adjustment for losses included in net income...............         8,626             --          8,626
                                                                                 -------------  -------------  -------------
       Total....................................................................       (26,872)         4,324        (22,548)
                                                                                 -------------  -------------  -------------
Total changes in equity from nonowner sources...................................                               (Yen) 920,750
                                                                                                               =============
</TABLE>

       See the accompanying notes to Consolidated Financial Statements.

                                      F-5

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY
           FOR THE FISCAL YEARS ENDED MARCH 31, 2002, 2003 AND 2004

<TABLE>
<CAPTION>
                                                                  2002            2003            2004
                                                             --------------  --------------  --------------
                                                                              (in millions)
<S>                                                          <C>             <C>             <C>
Preferred stock (Note 17):
Balance at beginning of fiscal year......................... (Yen)  122,100  (Yen)  122,100  (Yen)  122,100
                                                             --------------  --------------  --------------
Balance at end of fiscal year............................... (Yen)  122,100  (Yen)  122,100  (Yen)  122,100
                                                             ==============  ==============  ==============
Common stock (Note 18):
Balance at beginning of fiscal year......................... (Yen)  663,870  (Yen)  663,870  (Yen)  749,873
Issuance of new shares of common stock......................             --          86,003              --
                                                             --------------  --------------  --------------
Balance at end of fiscal year............................... (Yen)  663,870  (Yen)  749,873  (Yen)  749,873
                                                             ==============  ==============  ==============
Capital surplus (Note 18):
Balance at beginning of fiscal year......................... (Yen)  592,051  (Yen)  600,296  (Yen)  815,192
Issuance of new shares of common stock......................             --          85,240              --
Gains (losses) on sales of shares of treasury stock and
 parent company's stock, net of taxes.......................          8,584          74,822            (630)
Recognition of tax benefit arising from parent company's
 stock......................................................             --          54,008              --
Other.......................................................           (339)            826              21
                                                             --------------  --------------  --------------
Balance at end of fiscal year............................... (Yen)  600,296  (Yen)  815,192  (Yen)  814,583
                                                             ==============  ==============  ==============
Retained earnings appropriated for legal reserve (Note 19):
Balance at beginning of fiscal year......................... (Yen)  179,099  (Yen)  190,045  (Yen)  190,045
Transfer from unappropriated retained earnings..............         10,946              --              --
                                                             --------------  --------------  --------------
Balance at end of fiscal year............................... (Yen)  190,045  (Yen)  190,045  (Yen)  190,045
                                                             ==============  ==============  ==============
Unappropriated retained earnings (Note 19):
Balance at beginning of fiscal year......................... (Yen)  232,677  (Yen)   12,593  (Yen)  244,187
Net income (loss)...........................................       (132,671)        248,978         537,601
                                                             --------------  --------------  --------------
    Total...................................................        100,006         261,571         781,788
                                                             --------------  --------------  --------------
Deduction:
 Cash dividends (Note 1)
  Common stock--(Yen)14.96 per share in 2002, (Yen)3.00 per
    share in 2003 and (Yen)7.73 per share in 2004...........        (69,751)        (14,026)        (38,800)
  Preferred stock--(Yen)82.50 per share in 2002, (Yen)41.25
    per share in 2003 and (Yen)123.75 per share in 2004.....         (6,716)         (3,358)        (10,073)
 Transfer to retained earnings appropriated for legal
  reserve...................................................        (10,946)             --              --
 Hypothetical dividends under the separate return method
  (Note 9)..................................................             --              --         (35,930)
                                                             --------------  --------------  --------------
    Total...................................................        (87,413)        (17,384)        (84,803)
                                                             --------------  --------------  --------------
Balance at end of fiscal year (Note 32)..................... (Yen)   12,593  (Yen)  244,187  (Yen)  696,985
                                                             ==============  ==============  ==============
Accumulated other changes in equity from nonowner sources,
 net of taxes:
Net unrealized gains on investment securities available for
 sale (Note 4):
 Balance at beginning of fiscal year........................ (Yen)  899,929  (Yen)  608,750  (Yen)  183,254
 Net change during the fiscal year..........................       (291,179)       (425,496)        361,012
                                                             --------------  --------------  --------------
 Balance at end of fiscal year.............................. (Yen)  608,750  (Yen)  183,254  (Yen)  544,266
                                                             --------------  --------------  --------------
Net unrealized gains on derivatives qualifying for cash
 flow hedges (Note 22):
 Balance at beginning of fiscal year........................ (Yen)       --  (Yen)    3,696  (Yen)    4,523
 Cumulative effect of a change in accounting principle......          1,257              --              --
 Net change during the fiscal year..........................          2,439             827          (3,152)
                                                             --------------  --------------  --------------
 Balance at end of fiscal year.............................. (Yen)    3,696  (Yen)    4,523  (Yen)    1,371
                                                             --------------  --------------  --------------
Minimum pension liability adjustments (Note 15):
 Balance at beginning of fiscal year........................ (Yen)  (83,213) (Yen) (141,559) (Yen) (201,466)
 Net change during the fiscal year..........................        (58,346)        (59,907)         47,837
                                                             --------------  --------------  --------------
 Balance at end of fiscal year.............................. (Yen) (141,559) (Yen) (201,466) (Yen) (153,629)
                                                             --------------  --------------  --------------
Foreign currency translation adjustments:
 Balance at beginning of fiscal year........................ (Yen) (196,015) (Yen) (126,103) (Yen) (170,190)
 Net change during the fiscal year..........................         69,912         (44,087)        (22,548)
                                                             --------------  --------------  --------------
 Balance at end of fiscal year.............................. (Yen) (126,103) (Yen) (170,190) (Yen) (192,738)
                                                             --------------  --------------  --------------
Balance at end of fiscal year............................... (Yen)  344,784  (Yen) (183,879) (Yen)  199,270
                                                             ==============  ==============  ==============
Treasury stock and parent company's stock:
Balance at beginning of fiscal year......................... (Yen)     (382) (Yen)  (26,684) (Yen)   (1,775)
Sales of shares of parent company's stock...................          2,364          26,017             907
Net increase resulting from changes in the shares of
 subsidiaries...............................................             --          (1,108)            145
Net increase resulting from the stock-for-stock exchanges
 on April 2, 2001, creating Mitsubishi Tokyo Financial
 Group, Inc. (Note 1).......................................        (28,666)             --              --
                                                             --------------  --------------  --------------
Balance at end of fiscal year............................... (Yen)  (26,684) (Yen)   (1,775) (Yen)     (723)
                                                             ==============  ==============  ==============
Total shareholder's equity.................................. (Yen)1,907,004  (Yen)1,935,743  (Yen)2,772,133
                                                             ==============  ==============  ==============
</TABLE>

       See the accompanying notes to Consolidated Financial Statements.

                                      F-6

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
           FOR THE FISCAL YEARS ENDED MARCH 31, 2002, 2003 AND 2004

<TABLE>
<CAPTION>
                                                                   2002              2003              2004
                                                             ----------------  ----------------  ----------------
                                                                                 (in millions)
<S>                                                          <C>               <C>               <C>
Cash flows from operating activities:
 Net income (loss).......................................... (Yen)   (132,671) (Yen)    248,978  (Yen)    537,601
 Adjustments to reconcile net income (loss) to net cash
  provided by (used in) operating activities:
  Loss (income) from discontinued operations--net...........           (1,235)          (10,370)              585
  Depreciation and amortization.............................           88,436            92,619           102,395
  Goodwill amortization.....................................            4,556                --                --
  Provision (credit) for credit losses......................          466,947           287,282          (142,362)
  Investment securities gains--net..........................          (11,675)          (33,847)          (97,763)
  Foreign exchange losses (gains)--net......................          420,522          (238,408)         (299,265)
  Provision for deferred income tax expense (benefit).......         (100,078)          (10,339)          288,366
  Increase in trading account assets, excluding foreign
    exchange contracts......................................         (165,387)       (1,282,820)         (618,016)
  Increase (decrease) in trading account liabilities,
    excluding foreign exchange contracts....................       (1,718,349)        1,386,096           584,844
  Decrease in accrued interest receivable and other
    receivables.............................................          120,647            46,103            13,691
  Decrease in accrued interest payable and other payables...         (146,342)          (76,129)          (13,525)
  Other--net................................................           54,324            76,508            78,600
                                                             ----------------  ----------------  ----------------
    Net cash provided by (used in) operating activities.....       (1,120,305)          485,673           435,151
                                                             ----------------  ----------------  ----------------
Cash flows from investing activities:
  Proceeds from sales of investment securities available
    for sale................................................       30,670,994        22,403,930        21,657,326
  Proceeds from maturities of investment securities
    available for sale......................................        7,106,522        14,922,432        14,105,644
  Purchases of investment securities available for sale.....      (39,732,250)      (37,445,822)      (38,417,403)
  Proceeds from maturities of investment securities being
    held to maturity........................................               --                --            23,101
  Purchases of investment securities being held to maturity.               --                --        (1,029,334)
  Proceeds from sales of other investment securities........           11,152            16,996            31,665
  Purchases of other investment securities..................          (15,583)          (36,065)          (93,936)
  Proceeds from sales of equity investments in a subsidiary.           (6,414)               --            (2,186)
  Net increase in loans.....................................       (1,095,369)         (287,536)         (927,293)
  Net decrease in interest-earning deposits in other banks..        1,533,658           414,498           243,785
  Net decrease (increase) in call loans, funds sold, and
    receivables under resale agreements and securities
    borrowing transactions..................................        1,056,868           963,377        (4,270,486)
  Proceeds from sales of premises and equipment.............           13,858            12,582            34,709
  Capital expenditures for premises and equipment...........          (65,614)          (38,763)          (42,630)
  Other--net................................................          (98,609)           73,446          (250,797)
                                                             ----------------  ----------------  ----------------
    Net cash provided by (used in) investing activities.....         (620,787)          999,075        (8,937,835)
                                                             ----------------  ----------------  ----------------
Cash flows from financing activities:
  Net increase in deposits..................................        1,904,355         4,401,258         4,455,161
  Net decrease in debentures................................       (1,136,986)       (1,639,508)         (370,103)
  Net increase (decrease) in call money, funds purchased,
    and payables under repurchase agreements and securities
    lending transactions....................................           (3,354)       (1,139,339)           79,048
  Net increase (decrease) in other short-term borrowings....          648,011          (848,892)        2,859,880
  Proceeds from issuance of long-term debt..................          818,407         1,015,300         1,219,410
  Repayment of long-term debt...............................         (682,718)       (1,265,220)         (658,685)
  Proceeds from issuance of new shares of common stock, net
    of stock issue expenses.................................               --           171,242                --
  Proceeds from sales of treasury stock and parent
    company's stock.........................................           17,348            65,056               805
  Dividends paid............................................          (76,471)          (17,384)          (48,873)
  Other--net................................................          163,732            63,276            38,080
                                                             ----------------  ----------------  ----------------
    Net cash provided by financing activities...............        1,652,324           805,789         7,574,723
                                                             ----------------  ----------------  ----------------
Effect of exchange rate changes on cash and cash equivalents           63,568           (46,272)          (72,636)
                                                             ----------------  ----------------  ----------------
Net increase (decrease) in cash and cash equivalents........          (25,200)        2,244,265        (1,000,597)
                                                             ----------------  ----------------  ----------------
Cash and cash equivalents at beginning of fiscal year.......        1,545,714         1,520,514         3,764,779
                                                             ----------------  ----------------  ----------------
Cash and cash equivalents at end of fiscal year............. (Yen)  1,520,514  (Yen)  3,764,779  (Yen)  2,764,182
                                                             ================  ================  ================
Supplemental disclosure of cash flow information:
Cash paid during the fiscal year for:
Interest.................................................... (Yen)    926,909  (Yen)    511,089  (Yen)    352,661
Income taxes................................................           90,758            54,028            52,968
Non-cash investing activities:
Loans transferred to other real estate owned................            7,605               124               750
Available-for-sale securities transferred to
 held-to-maturity category (Note 4).........................               --                --            50,398
Marketable equity securities exchanged for parent company's
 stock (Note 1).............................................           28,666                --                --
Marketable equity securities transferred to employee
 retirement benefit trusts (Note 15)........................          122,231                --                --
Deconsolidation of Nippon Trust Bank Limited by exchange
 for the parent company's stock (Note 1)
 Assets at carrying value................................... (Yen)    900,971                --                --
 Liabilities at carrying value..............................          902,665                --                --
                                                             ----------------  ----------------  ----------------
  Net....................................................... (Yen)     (1,694)               --                --
                                                             ================  ================  ================
</TABLE>

       See the accompanying notes to Consolidated Financial Statements.

                                      F-7

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. BASIS OF FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Financial Statements

The Bank of Tokyo-Mitsubishi, Ltd. (Kabushiki Kaisha Tokyo Mitsubishi Ginko)
(the "Bank") is a wholly owned subsidiary of Mitsubishi Tokyo Financial Group,
Inc. ("MTFG"). On April 2, 2001, MTFG was established, as a bank holding
company, through which the Bank, The Mitsubishi Trust and Banking Corporation
("Mitsubishi Trust"), and Nippon Trust Bank Limited ("NTB"), a former
subsidiary of the Bank, have become wholly owned subsidiaries of MTFG pursuant
to the stock-for-stock exchanges. Effective April 2, 2001, NTB has been
deconsolidated.

The accompanying consolidated financial statements include the accounts of the
Bank and its subsidiaries (together, the "Group") and exclude accounts of MTFG
and Mitsubishi Trust. Effective April 2, 2001, NTB was deconsolidated and,
accordingly, its accounts has been excluded from the consolidated financial
statements for the fiscal year ended March 31, 2002. The consolidated financial
statements are stated in Japanese yen, the currency of the country in which the
Bank is incorporated and principally operates. The accompanying consolidated
financial statements have been prepared on the basis of accounting principles
generally accepted in the United States of America ("US GAAP"). In certain
respects, the accompanying consolidated financial statements reflect
adjustments which are not included in the consolidated financial statements
issued by the Bank and certain of its subsidiaries in accordance with
applicable statutory requirements and accounting practices in the countries of
incorporation. The major adjustments include those relating to (1) investment
securities, (2) derivative financial instruments, (3) allowance for credit
losses, (4) income taxes, (5) foreign currency translation, (6) premises and
equipment, (7) transfer of financial assets, (8) pension liability, (9)
goodwill, and (10) lease transactions.

Fiscal periods of certain subsidiaries, which ended on or after December 31,
and the Bank's fiscal year, which ended on March 31, have been treated as
coterminous. For the fiscal years ended March 31, 2002, 2003 and 2004, the
effect of recording intervening events for the three-month periods ended March
31 on the Bank's proportionate equity in net income of subsidiaries with fiscal
periods ending on December 31, would have resulted in a decrease of (Yen)2.12
billion, an increase of (Yen)3.48 billion, and an increase of (Yen)2.93
billion, respectively, to net income. No intervening events occurred during
each of the three-month periods ended March 31, 2002, 2003 and 2004 which, if
recorded, would have had effects of more than 1% of total assets, loans, total
liabilities, deposits or shareholder's equity as of March 31, 2002, 2003 and
2004.

Description of Business

The Group conducts domestic and international financial business through
domestic and international networks of branches, offices and subsidiaries in
Japan and around the world. The Bank is a major commercial banking institution,
providing a broad range of financial services to consumers and corporations
through commercial banking, investment banking and other activities. As one of
the principal subsidiaries of MTFG, the Group's activities also encompass
transactions with other subsidiaries of MTFG. These transactions are, however,
conducted on an arms-length base, requiring terms and conditions commonly
adopted in the marketplace. NTB had been one of the major domestic subsidiaries
of the Bank before the business combination and was acting as a trust vehicle
for the Bank. On April 2, 2001, NTB became a wholly owned subsidiary of MTFG
and has been deconsolidated from the Bank and was merged with and into
Mitsubishi Trust, the other principal subsidiary of MTFG on October 1, 2001.
The merger also involved The Tokyo Trust Bank, Ltd. ("TTB"), merging with and
into Mitsubishi Trust. See Note 27 for more information by business segment.

                                      F-8

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


Use of Estimates

The preparation of consolidated financial statements in conformity with US GAAP
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosures of contingent assets and
liabilities at the date of the consolidated financial statements and the
reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates. Material estimates that are
particularly susceptible to significant change in the near term primarily
relate to the allowance for credit losses on loans and off-balance-sheet credit
instruments, deferred tax assets, derivative financial instruments, goodwill,
investment securities and accrued severance indemnities and pension liabilities.

Summary of Significant Accounting Policies

Significant accounting policies applied in the accompanying consolidated
financial statements are summarized below:

Consolidation--The consolidated financial statements include the accounts of
the Bank and its subsidiaries over which control is exercised through either
majority ownership of voting stock and/or other means, including, but not
limited to, the possession of the power to direct or cause the direction of the
management and policies of entities. In situations in which the Group has less
than 100% but greater than 50% of ownership in entities, such entities are
consolidated and minority interests are also recorded in Other liabilities.
Intercompany items have been eliminated. Investments in affiliated companies
(companies over which the Group has the ability to exercise significant
influence) are accounted for by the equity method of accounting and are
reported in Other assets. The Bank's equity interests in the earnings of these
equity investees and gains or losses realized on disposition of such
investments are reported in Other non-interest income or expense.

Assets that the Group holds in an agency, fiduciary or trust capacity are not
assets of the Group and, accordingly, are not included in the accompanying
consolidated balance sheets.

Variable interest entities created after January 31, 2003 for which the Group
is deemed to be the primary beneficiary are consolidated when the Group has a
variable interest that will absorb a majority of the entity's expected loss,
receive a majority of the entity's expected returns, or both. See Accounting
Changes--Variable Interest Entities and Note 24.

Cash Flows--For the purposes of reporting cash flows, cash and cash equivalents
are defined as those amounts included in the consolidated balance sheets under
the caption Cash and due from banks with original maturities of 90 days or
less. Cash flows from qualified hedging activities are classified in the same
category as the items being hedged.

Translation of Foreign Currency Financial Statements and Foreign Currency
Transactions--Financial statements of overseas entities are translated into
Japanese yen using the respective year-end exchange rates for assets and
liabilities. Income and expense items are translated at average rates of
exchange for the respective periods.

Except for overseas entities located in highly inflationary economies, foreign
currency translation gains and losses related to the financial statements of
overseas entities of the Group, net of related income tax effects, are credited
or charged directly to Foreign currency translation adjustments, a component of
accumulated other changes in equity from nonowner sources. Tax effects of gains
and losses on foreign currency translation of financial statements of overseas
entities are not recognized unless it is apparent that the temporary
differences will reverse in the foreseeable future. If applicable, foreign
exchange translation gains and losses pertaining to

                                      F-9

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

entities located in highly inflationary economies are recorded in Foreign
exchange gains (losses)--net, as appropriate. For these entities, premises and
equipment and the related depreciation and amortization thereof are translated
at exchange rates prevailing at dates of acquisition.

Foreign currency denominated assets and liabilities are translated into
Japanese yen at the respective year-end foreign exchange rates. Foreign
currency denominated income and expenses are translated using average rates of
exchange for the respective periods. Gains and losses from such translation are
included in Foreign exchange gains (losses)--net, as appropriate.

Repurchase Agreements, Securities Lending and Other Secured Financing
Transactions--Securities sold with agreements to repurchase ("repurchase
agreements"), securities purchased with agreements to resell ("resale
agreements") and securities lending and borrowing transactions are accounted
for as sales of securities with related off-balance-sheet forward repurchase
commitments or purchases of securities with related off-balance-sheet forward
resale commitments, if they meet the relevant conditions for the surrender of
control as provided by Statement of Financial Accounting Standards ("SFAS") No.
140, "Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities, a replacement of FASB Statement No. 125." If
the conditions are not met, the transactions are treated as secured financing
or lending.

Collateral--For secured lending transactions, including resale agreements,
securities borrowing transactions, commercial lending and derivative
transactions, the Group, as a secured party, has generally the right to require
the counterparties to provide collateral, including letters of credit, cash,
securities and other financial assets. For most securities lending
transactions, the Group maintains strict levels of collateralization governed
by daily mark-to-market analysis. Financial assets pledged as collateral are
generally negotiable financial instruments and are permitted to be sold or
repledged by secured parties. If the Group sells these financial assets
received as collateral, it recognizes the proceeds from the sale and its
obligation to return the collateral. For secured borrowing transactions,
principally repurchase agreements and securities lending transactions and
derivative transactions, where the secured party has the right to sell or
repledge financial assets pledged as collateral, the Group separately discloses
those financial assets pledged as collateral in the consolidated balance sheets.

Trading Account Securities--Securities and money market instruments held in
anticipation of short-term market movements and for resale to customers are
included in Trading account assets, and short trading positions of these
instruments are included in Trading account liabilities. Trading positions are
carried at fair value on the consolidated balance sheets and recorded on a
trade date basis. Changes in the fair value of trading positions are recognized
currently in Trading account profits--net, as appropriate.

Investment Securities--Debt securities for which the Group has both the
positive intent and ability to hold to maturity are classified as Securities
being held to maturity and carried at amortized cost. Debt securities that the
Group may not hold to maturity and marketable equity securities, other than
those classified as trading account securities, are classified as Securities
available for sale, and are carried at their fair values, with unrealized gains
and losses reported on a net-of-tax basis within accumulated other changes in
equity from nonowner sources, which is a component of shareholder's equity.
Nonmarketable equity securities are stated at cost as Other investment
securities.

Individual debt and equity securities are written down to fair value with the
resulting losses charged to operations when, in the opinion of management, a
decline in estimated fair value below the cost of such securities is other than
temporary. Such impairment loss is included in Investment securities gains
(losses)--net in the statement of operations. In determining other than
temporary declines in fair value to be recognized as an impairment loss on
investment securities, the Group generally considers factors such as the
financial condition of the issuer, the

                                     F-10

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

extent of decline in fair value, and the length of period that the decline in
fair value below cost has existed. See Note 4 for a further discussion of
other-than-temporary impairment. Interest and dividends on investment
securities are reported in Interest Income. Dividends are recognized when the
shareholders' right to receive the dividend is established. Gains and losses on
disposition of investment securities are computed using the average cost method
and are recognized on the trade date.

Derivative Financial Instruments--The Group engages in derivative activities
involving swaps, forwards and options, and other types of derivative contracts.
Derivatives are used in trading activities to generate trading revenues and fee
income for its own account and to respond to the customers' financial needs.
Derivatives are also used to manage its exposures to fluctuations in interest
and foreign exchange rates, equity and commodity prices.

Derivatives entered into for trading purposes are carried at fair value and are
reported as Trading account assets or Trading account liabilities. Fair values
are based on market or broker-dealer quotes when available. Valuation models
such as present value and pricing models are applied to current market
information to estimate fair values when such quotes are not available. The
Group defers trade date gains or losses on derivatives where the fair values of
those derivatives are not obtained from a quoted market price, supported by
comparison to other observable market transactions, or based upon a valuation
technique incorporating observable market data. The fair values of derivative
contracts executed with the same counterparty under legally enforceable master
netting agreements are presented on a net basis. Changes in the fair value of
such contracts are recognized currently in Foreign exchange gains (losses)--net
with respect to foreign exchange contracts and in Trading account profits--net
with respect to interest rate contracts and other types of contracts.

Embedded derivatives that are not clearly and closely related to the host
contracts and meet the definition of derivatives are separated from the host
contracts and measured at fair value unless the contracts embedding the
derivatives are measured at fair value in their entirety.

Derivatives are used for asset and liability management to manage exposures to
fluctuations in interest and foreign exchange rates arising from mismatches of
asset and liability positions. Such derivatives may include contracts that
qualify for hedge accounting. At inception of hedge accounting, each derivative
is designated as a hedging instrument and documented with related information
such as the risk management objective and strategy for the hedge, which
includes the hedged item and the risk being hedged and the method used to
assess the hedge's effectiveness. Derivatives are evaluated in order to
determine if they qualify for hedge accounting. The hedging derivative
instruments must be highly effective in achieving offsetting changes in fair
values or variable cash flows from the hedged items attributable to the risk
being hedged. Any ineffectiveness, which arises during the hedging
relationship, is recognized in Non-interest income or expense in the period in
which it arises. All qualifying hedging derivatives are valued at fair value
and included in Other assets or Other liabilities. For fair value hedges of
interest-bearing assets or liabilities, the change in the fair value of the
hedged item and the hedging instruments is recognized in net interest income to
the extent that it is effective. For all other fair value hedges, the change in
the fair value of the hedged item and change in fair value of the derivative
are recognized in non-interest income or expense. For cash flow hedges, the
unrealized changes in fair value to the extent effective are recognized in
accumulated other changes in equity from nonowner sources. Amounts realized on
cash flow hedges related to variable rate loans are recognized in net interest
income in the period when the cash flow from the hedged item is realized. The
fair value of cash flow hedges related to forecasted transactions, if any, is
recognized in non-interest income or expense in the period when the forecasted
transaction occurs. Any difference that arises from gains or losses on hedging
derivatives offsetting corresponding gains or losses on the hedged items, and
gains and losses on derivatives attributable to the risks excluded from the
assessment of hedge effectiveness are currently recognized in non-interest
income or expense. Derivatives that do not qualify for hedge accounting are
considered trading positions and are accounted for as such.

                                     F-11

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


Loans--Loans are carried at the principal amount outstanding, adjusted for
unearned income and deferred net nonrefundable loan fees and costs. Loans held
and intended for dispositions or sales in secondary markets are transferred to
the held-for-sale classification and carried at the lower of cost or estimated
fair value generally on an individual loan basis. Loan origination fees, net of
certain direct origination costs are deferred and recognized over the
contractual life of the loan as an adjustment of yield using the method that
approximates the interest method. Interest income on loans that are not
impaired is accrued and credited to interest income as it is earned. Unearned
income and discounts or premiums on purchased loans are deferred and recognized
over the life of the loan using a method that approximates the interest method.

Loans are considered impaired when, based on current information and events, it
is probable that the Group will be unable to collect the scheduled payments of
principal or interest when due according to the contractual terms of the loan
agreement. Factors considered by management in determining impairment include
payment status, collateral value, and the probability of collecting scheduled
principal and interest payments when due. Loans that experience insignificant
payment delays and payment shortfalls generally are not classified as impaired.
Management determines the significance of payment delays and payment shortfalls
on a case-by-case basis, taking into consideration all of the circumstances
surrounding the loan and the borrower, including the length of the delay, the
reasons for the delay, the borrower's prior payment record, and the amount of
the shortfall in relation to the principal and interest owed. Impairment is
measured on a loan by loan basis by either the present value of expected future
cash flows discounted at the loan's effective interest rate, the loan's
obtainable market price, or the fair value of the collateral if the loan is
collateral dependent.

Loans are generally placed on nonaccrual status when substantial doubt exists
as to the full and timely collection of either principal or interest, or when
principal or interest is contractually past due one month or more with respect
to loans of the Bank and certain domestic subsidiaries, and 90 days or more
with respect to loans of certain foreign banking subsidiaries. A nonaccrual
loan may be restored to an accrual basis when interest and principal payments
are current and management expects that the borrower will make future
contractual payments as scheduled. When a loan is placed on nonaccrual status,
interest accrued but not received is generally reversed against interest
income. Cash receipts on nonaccrual loans, for which the ultimate
collectibility of principal is uncertain, are applied as principal reductions;
otherwise, such collections are credited to income. The Group does not
capitalize any accrued interest in its principal balances of impaired loans at
each balance sheet date.

Loan Securitization--The Group securitizes and services commercial and
industrial loans in the normal course of business. The Group accounts for a
transfer of loans in a securitization transaction as a sale if it meets
relevant conditions for the surrender of control in accordance with SFAS No.
140. Otherwise, the transfer is accounted for as a collateralized borrowing
transaction. Interests in loans sold through a securitization accounted for as
a sale may be retained in the form of subordinated tranches or beneficial
interests. These retained interests are primarily recorded in Securities
available for sale. The previous carrying amount of the loans involved in the
transfer is allocated between the loans sold and the retained interests based
on their relative fair values at the date of the securitization. Since quoted
market prices are generally not available, the Group usually estimates fair
value of these retained interests based on the present value of future expected
cash flows by using modeling techniques that involve management's best
estimates of key assumptions, which may include default rates, recovery rates,
and discount rates. Retained interests that can contractually be prepaid or
otherwise settled in such a way that the Group would not recover substantially
all of its investment are accounted for as investment securities available for
sale.

Allowance for Credit Losses--The Group maintains an allowance for credit losses
to absorb losses inherent in the loan portfolio. Actual credit losses (amounts
deemed uncollectible, in whole or in part), net of recoveries, are deducted
from the allowance for credit losses, as net charge-offs, generally based on
detailed loan reviews and a

                                     F-12

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

credit assessment by management at each balance-sheet date. The Group generally
applies its charge-off policy to all loans in its portfolio regardless of the
type of borrower. A provision for credit losses, which is a charge against
earnings, is added to bring the allowance to a level which, in management's
opinion, is appropriate to absorb probable losses inherent in the credit
portfolio.

A key element relating to policies and discipline used in determining the
allowance for credit losses is the credit classification and the related
borrower categorization process. The categorization is based on conditions that
may affect the ability of borrowers to service their debt, taking into
consideration current financial information, historical payment experience,
credit documentation, public information, analyses of relevant industry
segments and current trends. In determining the appropriate level of the
allowance, the Group evaluates the probable loss by category of loan based on
its type and characteristics.

The allowance for credit losses for non-homogeneous loans consists of an
allocated allowance for specifically identified problem loans, an allocated
allowance for country risk exposure, a formula allowance and an unallocated
allowance. An allocated allowance is also established for large groups of
smaller-balance homogeneous loans. Non-homogeneous loans such as commercial
loans are evaluated individually and the allowance for such loans is comprised
of specific, country risk, formula and unallocated allowances.

The credit loss allowance for individual customers represents the impairment
allowance determined in accordance with SFAS No. 114, "Accounting by Creditors
for Impairment of a Loan." The Group measures the impairment of a loan, with
the exception of large groups of smaller-balance homogeneous loans that are
collectively evaluated for impairment, based on the present value of expected
future cash flows discounted at the loan's effective interest rate, or on the
loan's observable market price, or based on the fair value of the collateral if
the loan is collateral dependent, when it is probable that the Group will be
unable to collect all amounts due according to the contractual terms of the
loan agreement. For certain subsidiaries, some impaired loans are aggregated
for the purpose of measuring impairment using historical loss factors.
Generally, the Group's impaired loans include nonaccrual loans, restructured
loans and other loans specifically identified as impaired.

The credit loss allowance for country risk exposure is a country-specific
allowance for substandard, special mention and unclassified loans. The
allowance is established to supplement the formula allowance for these loans,
based on an estimate of probable losses relating to the exposure to countries
that are identified by management to have a high degree of transfer risk. The
measure is generally based on a function of default probability and the
recovery ratio with reference to external credit ratings. For the allowance for
specifically identified cross-border problem loans, the Group incorporates
transfer risk in its determination of related allowance for credit losses.

The formula allowance is calculated for group of loans collectively evaluated
for unidentified impairment by applying loss factors to outstanding
substandard, special mention and unclassified loans. The evaluation of inherent
loss for these loans involves a high degree of uncertainty, subjectivity and
judgment because probable credit losses are not easily identifiable or
measurable. In determining the formula allowance, the Group, therefore, relies
on a statistical analysis that incorporates loss factor percentages of total
loans outstanding based on historical experience. Corresponding to the
periodical impairment identification and self-assessment process, the
estimation of the formula allowance is back-tested by comparing the allowance
with the actual results subsequent to the balance sheet date.

The unallocated allowance represents an estimate of additional losses inherent
in the loan portfolio and is composed of attribution factors, which are based
upon management's evaluation of various conditions that are not directly or
indirectly measured in the determination of the allocated allowance. The
conditions evaluated in connection with the unallocated allowance may include
existing general economic and business conditions affecting the key lending
areas of the Group, credit quality trends, collateral values, loan volumes and

                                     F-13

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

concentrations, seasoning of the loan portfolio, specific industry conditions
within portfolio segments, recent loss experience in particular segments of the
portfolio, duration of the current business cycle, bank regulatory examination
results and findings of the Group's internal credit examiners.

The credit loss allowance for large groups of smaller-balance homogeneous loans
is focused on loss experience for the pool rather than on a detailed analysis
of individual loans. The allowance is determined primarily based on probable
net charge-offs and the probability of insolvency based on the number of
delinquencies.

Allowance for Off-Balance-Sheet Credit Instruments--The Group maintains an
allowance for credit losses on off-balance-sheet credit instruments, including
commitments to extend credit, guarantees, standby letters of credit and other
financial instruments. The allowance is recorded as a liability and includes
the specific allowance for specifically identified credit exposure and the
allocated formula allowance. With regard to the specific allowance for
specifically identified credit exposure and the allocated formula allowance,
the Group adopts the same methodology used in determining the allowance for
loan credit losses. Potential credit losses related to derivatives are
considered in the fair valuation of the derivatives.

Net changes in the allowance for off-balance-sheet credit instruments are
accounted for as Other non-interest expenses.

Premises and Equipment--Premises and equipment are stated at cost less
accumulated depreciation and amortization. Depreciation is charged to
operations over the estimated useful lives of the related assets. Leasehold
improvements are depreciated over the terms of the respective leases or the
estimated useful lives of the improvements, whichever are shorter. Depreciation
of premises and equipment is computed under the declining-balance method with
respect to premises and equipment of the Bank and certain subsidiaries, and
under the straight-line method with respect to premises and equipment of other
subsidiaries, at rates principally based on the following estimated useful
lives:

<TABLE>
<CAPTION>
                                                 Years
                                                --------
                        <S>                     <C>
                        Buildings.............. 35 to 50
                        Equipment and furniture 2 to 15
                        Leasehold improvements. 3 to 18
</TABLE>

Maintenance, repairs and minor improvements are charged to operations as
incurred. Major improvements are capitalized. Net gains or losses on
dispositions of premises and equipment are included in Other non-interest
income or expense, as appropriate.

Long-lived assets are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. Recoverability of an asset to be held and used is measured by a
comparison of the carrying amount to future undiscounted net cash flows
expected to be generated by the asset. If an asset is considered to be
impaired, the impairment to be recognized is measured by the amount by which
the carrying amount of the asset exceeds the fair value. For purposes of
recognition and measurement of an impairment loss, a long-lived asset or assets
are grouped with other assets and liabilities at the lowest level with
independent and identifiable cash flows. Assets to be disposed of by sale are
reported at the lower of the carrying amount or fair value less estimated cost
to sell.

Other Real Estate Owned--Real estate assets acquired in full or partial
satisfaction of debt are held for sale, and are initially recorded at fair
value less estimated cost to sell at the date of acquisition and classified as
Other assets. After acquisition, valuations are periodically performed by
management and the real estate assets are

                                     F-14

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

carried at the lower of the carrying amount or fair value less estimated cost
to sell. Routine holding costs, subsequent declines in appraisal value, and net
gains or losses on disposal are included in Losses (gains) on other real estate
owned as incurred.

Goodwill--The Group has classified as goodwill the excess of the cost of the
Group's investments in subsidiaries over the Group's share of net assets at
dates of acquisition in purchase transactions. Goodwill related to the
investments in affiliated companies is included in the investments accounted
for by the equity method. On April 1, 2002, the Group adopted SFAS No. 142,
"Goodwill and Other Intangible Assets," which provides goodwill acquired in a
purchase business combination should not be amortized and is subject to an
impairment test. Goodwill is recorded at a designated reporting unit level for
the purpose of assessing impairment. An impairment loss, if any, is recognized
to the extent that the carrying amount of goodwill exceeds its implied fair
value. Prior to the adoption of SFAS No. 142, in accordance with Accounting
Principles Board Opinion ("APB") No. 17, goodwill was amortized over periods
not exceeding 10 years.

Software--The Group capitalizes certain costs associated with the acquisition
or development of internal-use software. Costs subject to capitalization are
salaries and employee benefits for employees who are directly associated with
and who devote time to the internal-use computer software project, to the
extent of the time spent directly on the project. Once the software is ready
for its intended use, the Group begins to amortize capitalized costs on a
straight-line basis over its estimated useful life.

Accrued Severance and Pension Liabilities--The Bank and certain subsidiaries
have defined benefit retirement plans, including lump-sum severance indemnities
plans. The costs of the plans, based on actuarial computations of current and
future employee benefits, are charged to Salaries and employee benefits.

Debentures and Long-Term Debt--Premiums, discounts and issuance costs of
debentures and long-term debt are amortized based on the method that
approximates the interest method over the terms of the debentures and long-term
debt.

Obligations under Guarantees--The Group provides customers with a variety of
guarantees and similar arrangements, including standby letters of credit,
financial and performance guarantees, credit protections, and liquidity
facilities. The Group recognizes guarantee fee income over the guarantee
period. It is the Bank's dominant business practice to receive such guarantee
fee at the inception of the guarantee, which approximates market value of the
guarantee and is initially recorded as a liability, which is then recognized as
guarantee fee income ratably over the guarantee period.

Fees and Commissions--Revenue recognition of major components of fees and
commissions is as follows:

..   Fees on funds transfer and collection services and fees from investment
    banking services are generally recognized as revenue when the related
    services are performed.

..   Fees from trade-related financing services are recognized over the period
    of the financing.

..   Trust fees are recognized on an accrual basis, generally based on the
    volume of trust assets under management and/or the operating performance
    for the accounting period of each trust account.

..   Annual fees and royalty and other service charges related to the credit
    card business are recorded on a straight-line basis as services are
    provided.

..   Interchange income from credit card business is recognized as billed.

..   Service charges on deposit accounts, and fees and commissions from other
    services are generally recognized over the period that the service is
    provided.

                                     F-15

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


..   Fees on guarantees are generally recognized over the contractual periods of
    respective guarantees. Amounts initially recorded as a liability
    corresponding to the obligations at fair value are generally recognized as
    revenue over the terms of the guarantees as the Group is deemed to be
    released from the risk under guarantees.

Income Taxes--The provision for income taxes is determined using the asset and
liability method of accounting for income taxes. Under this method, deferred
income taxes reflect the net tax effects of (1) temporary differences between
the carrying amounts of assets and liabilities for financial reporting purposes
and the amounts used for income tax purposes, and (2) operating loss and tax
credit carryforwards. A valuation allowance is recognized for any portion of
the deferred tax assets where it is considered more likely than not that it
will not be realized. The provision for deferred taxes is based on the change
in the net deferred tax asset or liability from period to period.

Free Distributions of Common Shares--As permitted by the Commercial Code of
Japan (the "Code"), Japanese companies, upon approval by the Board of
Directors, may make a free distribution of shares, in the form of a "stock
split" as defined, to shareholders. In accordance with generally accepted
accounting practice in Japan, such distribution does not give rise to any
change in capital stock or capital surplus accounts. Common shares distributed
are recorded as shares issued on the distribution date. See Note 18.

Amounts per Common Share--Basic earnings per share ("EPS") excludes dilutive
effects of potential common shares and is computed by dividing income available
to common stock shareholders by the weighted average number of common shares
outstanding for the period, while diluted EPS gives effect to all dilutive
potential common shares that were outstanding during the period. See Note 21
for the computation of basic and diluted EPS.

Comprehensive Income (Loss)--The Group's comprehensive income includes net
income or loss and other changes in equity from nonowner sources. All changes
in unrealized gains and losses on investment securities available for sale,
unrealized gains and losses on derivatives qualifying for cash flow hedges,
minimum pension liability adjustments and foreign currency translation
adjustments constitute the Group's changes in equity from nonowner sources and
are presented, with related income tax effects, in the consolidated statements
of changes in equity from nonowner sources.

Stock-Based Compensation--In December 2002, Financial Accounting Standards
Board (the "FASB") issued SFAS No. 148, "Accounting for Stock-Based
Compensation--Transition and Disclosure, an amendment of FASB Statement No.
123," which amends SFAS No. 123, "Accounting for Stock-Based Compensation," to
provide alternative methods of transition for a voluntary change to the fair
value based method of accounting for stock-based employee compensation. It also
amends the disclosure requirements to require prominent disclosure in both
annual and interim financial statements about the method of accounting for
stock-based employee compensation and the effect of the method used on reported
results. The transition and annual disclosure requirements under this Statement
are effective for financial statements for fiscal years ending after December
15, 2002.

Two subsidiaries of the Bank have several stock-based compensation plans, which
are described more fully in Note 30. As permitted by the provisions of SFAS No.
123, they account for those stock-based compensation plans by the intrinsic
value-based method prescribed in APB No. 25, "Accounting for Stock Issued to
Employees" and related Interpretations. Under the intrinsic value-based method,
compensation expense is measured as the amount by which quoted market price of
these subsidiaries' stock at the date of grant exceeds the stock option
exercise price.

                                     F-16

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


Had the stock-based compensation plans been accounted for under the fair value
method of SFAS No. 123, the Group's compensation expense, net income (loss),
and net income (loss) per share would have been the pro forma amounts indicated
in the following table.

<TABLE>
<CAPTION>
                                                                                  Fiscal years ended March 31,
                                                                           -----------------------------------------
                                                                                2002          2003          2004
                                                                           -------------  ------------  ------------
                                                                                         (in millions)
<S>                                                                        <C>            <C>           <C>
Reported net income (loss)................................................ (Yen)(132,671) (Yen)248,978  (Yen)537,601
Stock-based employee compensation expense (determined under fair value
  based method for all awards, net of tax)................................        (1,369)       (2,015)       (1,962)
                                                                           -------------  ------------  ------------
Pro forma net income (loss), after stock-based employee compensation
  expense................................................................. (Yen)(134,040) (Yen)246,963  (Yen)535,639
                                                                           =============  ============  ============

Basic earnings (loss) per common share--net income (loss) available to a
  common shareholder:                                                                       (in Yen)
   Reported............................................................... (Yen)  (29.82) (Yen)  52.49  (Yen) 105.10
   Pro forma..............................................................        (30.11)        52.06        104.71
Diluted earnings (loss) per common share--net income (loss) available to a
  common shareholder:
   Reported...............................................................        (29.82)        49.11        104.81
   Pro forma..............................................................        (30.11)        48.69        104.42
</TABLE>

Stock-based compensation expense included in net income for the fiscal years
ended March 31, 2002, 2003 and 2004 was not significant.

Accounting Changes

Variable Interest Entities--In January 2003, the FASB issued FASB
Interpretation ("FIN") No. 46, "Consolidation of Variable Interest Entities, an
interpretation of ARB No. 51." FIN No. 46 addresses consolidation by business
enterprises of variable interest entities ("VIEs"). The consolidation
requirements of FIN No. 46 apply immediately to VIEs created after January 31,
2003. The consolidation requirements apply to older entities in the first
fiscal year or interim period beginning after June 15, 2003, which has been
amended by the FASB as described below.

In December 2003, the FASB issued FIN No. 46 (revised December 2003),
"Consolidation of Variable Interest Entities, an interpretation of ARB No. 51"
("FIN No. 46R"). FIN No. 46R modifies FIN No. 46 in certain respects including
the scope exception, the definition of VIEs, and other factors that would
affect the determination of VIEs and primary beneficiaries that must
consolidate VIEs. FIN No. 46R, as written, applies to VIEs created before
February 1, 2003 no later than the end of the first reporting period that ends
after March 15, 2004, and to all special purpose entities no later than the
first reporting period that ends after December 15, 2003. Subsequent to the
Issuance of FIN No. 46R, the Chief Accountant of the U.S. Securities and
Exchange Commission ("SEC") stated the SEC staff's position in a letter to the
American Institute of Certified Public Accountant ("AICPA") dated March 3,
2004, that the SEC staff does not object to the conclusion that FIN No. 46R
should not be required to be applied at a date earlier than the original FIN
No. 46 and that foreign private issuers would be required to apply FIN No. 46R
at various dates depending on the entity's year-end and the frequency of
interim reporting. In accordance with the letter, the Group is required to
adopt FIN No. 46R in its fiscal year ending March 31, 2005. The Group has
applied, as required, FIN No. 46 to all VIEs created after January 31, 2003.
See Note 24 for further discussion of the variable interest entities in which
the Group holds variable interests.

                                     F-17

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


Accounting for Asset Retirement Obligations--Effective April 1, 2003, the Group
adopted SFAS No. 143, "Accounting for Asset Retirement Obligations." SFAS No.
143 addresses the financial accounting and reporting for obligations associated
with the retirement of tangible long-lived assets and the associated asset
retirement costs. SFAS No. 143 applies to the legal obligations associated with
the retirement of long-lived assets that result from the acquisition,
construction, development, and/or the normal operation of a long-lived asset. A
legal obligation is an obligation that a party is required to settle as a
result of an existing or enacted law, statute, ordinance, or written or oral
contract, or by legal construction of a contract under the doctrine of
promissory estoppel. The adoption of SFAS No. 143 did not have a material
impact on the Group's financial position or results of operations.

Certain Financial Instruments with Characteristics of both Liabilities and
Equity--In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity."
SFAS No. 150 establishes standards for how an issuer classifies and measures
certain financial instruments with characteristics of both liabilities and
equity. SFAS No. 150 is effective for financial instruments entered into or
modified after May 31, 2003, and otherwise is effective at the beginning of the
first interim period beginning after June 15, 2003, which is the Group's fiscal
year ending March 31, 2005. On November 7, 2003, FASB Staff Position No. 150-3,
"Effective Date, Disclosures, and Transition for Mandatorily Redeemable
Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily
Redeemable Noncontrolling Interests under FASB Statement No. 150, Accounting
for Certain Financial Instruments with Characteristics of Both Liabilities and
Equity," delayed the effective date of certain provisions of SFAS No. 150 for
certain mandatorily redeemable noncontrolling interests.

The Group is not a party to any financial instruments entered into after May
31, 2003, to which SFAS No. 150 must be applied immediately, but has not
completed evaluating the impact of the adoption of SFAS No. 150 to other
instruments. Accordingly, the Group cannot reasonably estimate the ultimate
impact of SFAS No. 150 on its financial position or results of operations.

Disclosure about pension and other postretirement benefit--On December 2003,
the FASB issued SFAS No. 132 (revised 2003), "Employers' Disclosures about
Pensions and Other Postretirement Benefits, an amendment of FASB Statements No.
87, 88, and 106" ("SFAS No. 132R"), which replaces existing FASB disclosure
requirements for pensions. SFAS No. 132R requires disclosure of more details
about plan assets, benefit obligations, cash flows, benefit costs and other
relevant information. SFAS No. 132R is generally effective for the fiscal years
ending after December 15, 2003, and for interim periods beginning after
December 15, 2003. See Note 15 for the required disclosure.

Impairment of securities investments--In November 2003, the FASB Emerging
Issues Task Force (the "EITF") reached a consensus on Issue No. 03-1, "The
Meaning of Other-Than-Temporary Impairment and Its Application to Certain
Investments" ("EITF 03-1"). EITF 03-1 requires certain additional quantitative
and qualitative disclosures in addition to the disclosures already required by
SFAS No. 115, "Accounting for Certain Investments in Debt and Equity
Securities." The new disclosure requirements are applied to financial
statements for the fiscal years ending after December 15, 2003. See Note 4 for
the required disclosures. In March 2004, the EITF also reached a consensus on
the additional accounting guidance for other-than-temporary impairments, which
requires an evaluation and recognition of other-than-temporary impairment by a
three-step impairment test. The guidance should be applied for reporting
periods beginning after June 15, 2004. The Group has not completed its study of
what effect the guidance will have on its financial position or results of
operations.

Guarantor's Accounting and Disclosure Requirements for Guarantees--Effective
January 1, 2003, the Group adopted the initial recognition and measurement
provisions of FIN No. 45, "Guarantor's Accounting and

                                     F-18

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Disclosure Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness of Others, an interpretation of FASB Statements No. 5, 57, and 107
and rescission of FASB interpretation No. 34," which requires that, for
guarantees within the scope of FIN No. 45 issued or amended after December 31,
2002, a liability for the fair value of the obligation undertaken in issuing
the guarantee be recognized. The adoption of FIN No. 45 did not have a material
impact on the Group's financial position or results of operations.

Costs Associated with Exit or Disposal Activities--In June 2002, the FASB
issued SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal
Activities." SFAS No. 146 is effective for exit or disposal activities that are
initiated after December 31, 2002. This statement addresses financial
accounting and reporting for costs associated with exit or disposal activities
and nullifies EITF Issue No. 94-3, "Liability Recognition for Certain Employee
Termination Benefits and Other Costs to Exit an Activity (including Certain
Costs Incurred in a Restructuring)." The adoption of SFAS No. 146 did not have
a material impact on the Group's financial position or results of operations.

Goodwill and Other Intangible Assets--Effective April 1, 2002, the Group
adopted SFAS No. 142, "Goodwill and Other Intangible Assets." SFAS No. 142
requires that goodwill, formerly amortized over its useful life, no longer be
amortized but rather tested for impairment at least annually. Further, SFAS No.
142 requires that intangible assets that have finite useful lives will continue
to be amortized over their useful lives while intangible assets with indefinite
lives will no longer be amortized and are subject to impairment testing at
least annually.

The Group performed the required transitional impairment tests of goodwill and
intangible assets with indefinite lives upon adoption of SFAS No. 142. The
initial adoption resulted in a cumulative adjustment charge to earnings of
(Yen)532 million.

Derivative Instruments and Hedging Activities--On April 1, 2001, the Group
adopted SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities," as amended by SFAS No. 137 and SFAS No. 138. SFAS No. 133 requires
that all derivatives, whether designated as a hedge or not, be recorded on the
balance sheet at fair value. SFAS No. 133 also requires that derivative
instruments used to hedge be identified specifically to assets, liabilities,
firm commitments or anticipated transactions and be expected to remain
effective throughout the life of the hedge. Derivative instruments that do not
qualify as either a fair value hedge or cashflow hedge are valued at fair value
and classified as trading account assets or liabilities with the resultant gain
or loss recognized in current earnings. The cumulative effect of the change in
accounting principle, net of tax, was to increase net income by (Yen)5,867
million and other changes in equity from nonowner sources by (Yen)1,257
million, respectively, in 2002.

In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities." SFAS No. 149 amends and
clarifies accounting for derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging activities under SFAS
No. 133. In particular, SFAS No. 149 (1) clarifies under what circumstances a
contract with an initial net investment meets the characteristics of a
derivative, (2) clarifies when a derivative contains a financing component that
warrants special reporting in the statement of cash flows, (3) amends the
definition of underlyings, one of three characteristics of derivatives, to
include the occurrence or non-occurrence of a specified event such as scheduled
payment under a contract, and (4) amends certain other existing pronouncements,
in particular, those related to the scope of instruments that are subject to
the requirements of SFAS No. 133. SFAS No. 149 is generally effective for
contracts entered into or modified after June 30, 2003. The adoption of SFAS
No. 149 did not have a material impact on the Group's financial position or
results of operations.

                                     F-19

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


Reclassifications

Certain reclassifications and format changes of the financial statements for
the fiscal years ended March 31, 2002 and 2003 have been made to conform to the
current year presentation.

Recently Issued Accounting Pronouncements

Transfer to the Japanese Government of the Substitutional Portion of Employee
Pension Fund Liabilities--In January 2003, the EITF reached a consensus on
Issue No. 03-2, "Accounting for the Transfer to the Japanese Government of the
Substitutional Portion of Employee Pension Fund Liabilities" ("EITF 03-2"),
which was ratified by the FASB in February 2003. EITF 03-2 addresses accounting
for a transfer to the Japanese government of a substitutional portion of an
employee pension fund and requires employers to account for the entire
separation process of the substitutional portion from an entire plan upon
completion of the transfer to the government of the substitutional portion of
the benefit obligation and related plan assets as the culmination of a series
of steps in a single settlement transaction. It also requires that the
difference between the fair value of the obligation and the assets required to
be transferred to the government, if any, should be accounted for as a subsidy
from the government, separately from gain or loss on settlement of the
substitutional portion of the obligation, upon completion of the transfer.

In June 2003, the Bank submitted to the government an application to transfer
the obligation to pay benefits for future employee service related to the
substitutional portion and the application was approved in August 2003. To
complete the entire separation process, in August 2004, the Bank made another
application for transfer to the government of the remaining substitutional
portion, but the timing of the approval is not known yet. Upon completion of
the separation, the substitutional obligation and related plan assets will be
transferred to a government agency, and the Bank will be released from paying
the substitutional portion of the benefits to its employees. The impact on the
results of operations and financial position of the transfer accounted for in
accordance with EITF 03-2 is not known and cannot be reasonably estimable until
the completion of the transfer.

Loans and Debt Securities Acquired in a Transfer--In December 2003, AICPA
issued Statement of Position 03-3, "Accounting for Certain Loans or Debt
Securities Acquired in a Transfer" ("SOP 03-3"), which supersedes AICPA
Practice Bulletin 6, "Amortization of Discounts on Certain Acquired Loans" and
addresses accounting for differences between contractual cash flows and cash
flows expected to be collected from an investor's initial investment in loans
or debt securities acquired in a transfer if those differences are
attributable, at least, in part, to credit quality. SOP 03-3 limits accretable
yield to the excess of the investor's estimate of undiscounted cash flows over
the investor's initial investment in the loan and prohibits the recognition of
the non-accretable difference. Under SOP 03-3, subsequent increases in cash
flows expected to be collected generally should be recognized prospectively
through adjustment of the loan's yield over its remaining life while any
decreases in such cash flows should be recognized as impairments. SOP 03-3 also
provides guidance with regard to presentation and disclosures.

SOP 03-3 is effective for loans acquired in fiscal years beginning after
December 15, 2004. The Group has not completed the study of what effect SOP
03-3 will have on its financial position or results of operations.

                                     F-20

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


2. DISCONTINUED OPERATIONS

During the fiscal year ended March 31, 2004, the Bank completed the liquidation
process of its domestic mortgage securities subsidiary, The Diamond Mortgage
Co., Ltd. The dissolution was due to the adverse business environment for the
domestic mortgage securities business, whose results were reported as a part of
the Commercial Banking business unit of the Group. In addition, during the
fiscal year ended March 31, 2004, as a part of the Group's efforts to
streamline its securities business, Mitsubishi Securities, which itself
constitutes a reportable operating segment of the Group, sold certain domestic
subsidiaries to third parties. The Bank also sold its securities subsidiary in
Europe to third parties.

In accordance with SFAS No. 144, "Accounting for Impairment of Disposal of
Long-Lived Assets," the Bank presents the results of discontinued operations as
a separate line item in the consolidated statements of operations. Amounts
presented in the consolidated statements of operations and the consolidated
statements of cash flows for the prior fiscal years related to the discontinued
operations were reclassified to conform the presentation for the fiscal year
ended March 31, 2004.

The following table shows the results of discontinued operations for the fiscal
years ended March 31, 2002, 2003, and 2004:

<TABLE>
<CAPTION>
                                                        2002         2003          2004
                                                    -----------  ------------  -----------
                                                                 (in millions)
<S>                                                 <C>          <C>           <C>
Total revenue...................................... (Yen) 3,330  (Yen)  3,077  (Yen) 3,240
                                                    -----------  ------------  -----------
Income (loss) from discontinued operations......... (Yen)(1,716) (Yen)(16,227) (Yen) 2,185
Loss on disposal...................................          --            --       (2,026)
Income tax expense (benefit).......................      (2,951)      (26,597)         744
                                                    -----------  ------------  -----------
   Income (loss) from discontinued operations--net. (Yen) 1,235  (Yen) 10,370  (Yen)  (585)
                                                    ===========  ============  ===========
</TABLE>

The following is a summary of the assets and liabilities of discontinued
operations at March 31, 2003:

<TABLE>
<CAPTION>
                                                      (in millions)
                                                      -------------
            <S>                                       <C>
            Cash.....................................  (Yen) 8,326
            Receivables under resale agreements......        3,841
            Loans, net of allowance for credit losses       11,612
            Other assets.............................       15,092
                                                       -----------
               Total assets..........................  (Yen)38,871
                                                       ===========
            Payables under repurchase agreements.....  (Yen) 3,820
            Other short-term borrowings..............       10,820
            Other liabilities........................        1,001
                                                       -----------
               Total liabilities.....................  (Yen)15,641
                                                       ===========
</TABLE>

                                     F-21

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


3. TRADING ACCOUNT ASSETS AND LIABILITIES

The following table shows trading account assets and liabilities, carried at
estimated fair value, at March 31, 2003 and 2004. For trading derivative
contracts executed under legally enforceable master netting agreements, related
assets and liabilities are bilaterally offset and reported net by counterparty.

<TABLE>
<CAPTION>
                                                                               2003             2004
                                                                         ---------------  ---------------
                                                                                   (in millions)
<S>                                                                      <C>              <C>
Trading account assets:
   Trading securities:
       Japanese government, prefectural and municipal bonds............. (Yen) 1,804,453  (Yen) 1,593,555
       Commercial paper.................................................       2,335,622        2,966,643
       Foreign governments bonds and other securities...................         462,120        1,182,408
                                                                         ---------------  ---------------
          Total.........................................................       4,602,195        5,742,606
                                                                         ---------------  ---------------
   Trading derivative assets:
     Interest rate contracts:
       Forward and futures..............................................          27,823           13,327
       Swap and swap-related products...................................       3,699,174        2,919,846
       Options purchased................................................         126,684           93,994
                                                                         ---------------  ---------------
          Total.........................................................       3,853,681        3,027,167
                                                                         ---------------  ---------------
     Foreign exchange contracts:
       Forward and futures..............................................         534,436          534,113
       Swaps............................................................         467,618          284,590
       Options purchased................................................          57,614           86,992
                                                                         ---------------  ---------------
          Total.........................................................       1,059,668          905,695
                                                                         ---------------  ---------------
     Other contracts, mainly equity and credit-related contracts........          39,256           26,784
     Bilateral netting of derivatives under master netting agreements...      (1,672,791)      (1,664,389)
                                                                         ---------------  ---------------
Total................................................................... (Yen) 7,882,009  (Yen) 8,037,863
                                                                         ===============  ===============
Trading account liabilities:
   Trading securities sold, not yet purchased........................... (Yen)   205,708  (Yen)   220,283
   Trading derivative liabilities:
     Interest rate contracts:
       Forward and futures..............................................          33,687           11,236
       Swap and swap-related products...................................       3,510,051        2,791,918
       Options written..................................................         112,166           96,454
                                                                         ---------------  ---------------
          Total.........................................................       3,655,904        2,899,608
                                                                         ---------------  ---------------
     Foreign exchange contracts:
       Forward and futures..............................................         480,389          484,005
       Swaps............................................................         566,158          319,970
       Options written..................................................          67,344           86,709
                                                                         ---------------  ---------------
          Total.........................................................       1,113,891          890,684
                                                                         ---------------  ---------------
     Other contracts, mainly equity and credit-related contracts........          32,992           57,263
     Bilateral netting of derivatives under master netting agreements...      (1,672,791)      (1,664,389)
                                                                         ---------------  ---------------
Total................................................................... (Yen) 3,335,704  (Yen) 2,403,449
                                                                         ===============  ===============
</TABLE>

See Note 29 for the methodologies and assumptions used to estimate fair values.

                                     F-22

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


The Group performs trading activities through market-making, sales and
arbitrage, while maintaining risk levels within appropriate limits in
accordance with its risk management policy. Net trading gains for the fiscal
years ended March 31, 2002, 2003 and 2004 comprised the following:

<TABLE>
<CAPTION>
                                                      2002          2003          2004
                                                  ------------  ------------  ------------
                                                               (in millions)
<S>                                               <C>           <C>           <C>
Interest rate and other derivative contracts..... (Yen)120,926  (Yen)262,676  (Yen) 14,710
Trading account securities, excluding derivatives       (9,851)       11,047       102,562
                                                  ------------  ------------  ------------
Trading account profits--net.....................      111,075       273,723       117,272
Foreign exchange derivative contracts............      (44,990)      (80,303)       22,836
                                                  ------------  ------------  ------------
Net trading gains................................ (Yen) 66,085  (Yen)193,420  (Yen)140,108
                                                  ============  ============  ============
</TABLE>

4. INVESTMENT SECURITIES

The amortized costs and estimated fair values of investment securities
available for sale and being held to maturity at March 31, 2003 and 2004 were
as follows:

<TABLE>
<CAPTION>
                                                              2003
                                    -------------------------------------------------------- ---------------
                                                       Gross       Gross
                                       Amortized     unrealized  unrealized    Estimated        Amortized
                                         cost          gains       losses      fair value         cost
                 -                  --------------- ------------ ----------- --------------- ---------------
                                                                                       (in millions)
<S>                                 <C>             <C>          <C>         <C>             <C>
Securities available for sale:
  Debt securities:
   Japanese national government
    and Japanese government
    agency bonds................... (Yen) 8,755,763 (Yen) 56,486 (Yen) 1,932 (Yen) 8,810,317 (Yen)12,599,395
   Japanese prefectural and
    municipal bonds................         402,576        6,969          24         409,521         205,313
   Foreign governments and
    official institutions bonds....       2,144,662       59,215       3,814       2,200,063       1,408,080
   Corporate bonds.................       1,196,637        7,876       4,665       1,199,848       1,472,692
   Mortgage-backed securities......       1,139,648       17,696       6,302       1,151,042       1,118,981
   Other debt securities...........         329,846          456         786         329,516         266,101
  Marketable equity securities.....       2,092,116      633,718      25,015       2,700,819       1,819,243
                                    --------------- ------------ ----------- --------------- ---------------
Total.............................. (Yen)16,061,248 (Yen)782,416 (Yen)42,538 (Yen)16,801,126 (Yen)18,889,805
                                    =============== ============ =========== =============== ===============
Securities being held to maturity--
 debt securities:
   Japanese national government
    and Japanese government
    agency bonds................... (Yen)        -- (Yen)     -- (Yen)    -- (Yen)        -- (Yen)   996,398
   Foreign governments and
    official institutions bonds....              --           --          --              --          18,112
   Corporate bonds.................              --           --          --              --          35,569
   Other debt securities...........              --           --          --              --           2,114
                                    --------------- ------------ ----------- --------------- ---------------
Total.............................. (Yen)        -- (Yen)     -- (Yen)    -- (Yen)        -- (Yen) 1,052,193
                                    =============== ============ =========== =============== ===============
</TABLE>
<TABLE>
<CAPTION>
                                                2004
                                    -------------------------------------------
                                        Gross        Gross
                                      unrealized   unrealized    Estimated
                                        gains        losses      fair value
                 -                  -------------- ----------- ---------------

<S>                                 <C>            <C>         <C>
Securities available for sale:
  Debt securities:
   Japanese national government
    and Japanese government
    agency bonds................... (Yen)   18,225 (Yen) 9,830 (Yen)12,607,790
   Japanese prefectural and
    municipal bonds................          2,085          --         207,398
   Foreign governments and
    official institutions bonds....         20,502       4,587       1,423,995
   Corporate bonds.................         23,741         601       1,495,832
   Mortgage-backed securities......         30,656       4,553       1,145,084
   Other debt securities...........          2,330       2,477         265,954
  Marketable equity securities.....      1,322,676       1,206       3,140,713
                                    -------------- ----------- ---------------
Total.............................. (Yen)1,420,215 (Yen)23,254 (Yen)20,286,766
                                    ============== =========== ===============
Securities being held to maturity--
 debt securities:
   Japanese national government
    and Japanese government
    agency bonds................... (Yen)    1,605 (Yen) 1,218 (Yen)   996,785
   Foreign governments and
    official institutions bonds....             80          --          18,192
   Corporate bonds.................             --           3          35,566
   Other debt securities...........              5          --           2,119
                                    -------------- ----------- ---------------
Total.............................. (Yen)    1,690 (Yen) 1,221 (Yen) 1,052,662
                                    ============== =========== ===============
</TABLE>

Investment securities other than securities available for sale or being held to
maturity (i.e., nonmarketable equity securities presented in Other investment
securities) were carried at cost of (Yen)113,054 million and (Yen)160,343
million, at March 31, 2003 and 2004, respectively. The corresponding estimated
fair values at those dates were not readily determinable. The Group
periodically monitors the status of each investee including the credit ratings

                                     F-23

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

and changes in the Group's share of net assets in the investees as compared
with its shares at the time of investment, to determine if impairment losses,
if any, are to be recognized on these nonmarketable securities.

See Note 29 for the methodologies and assumptions used to estimate the fair
values.

The amortized cost and estimated fair values of debt securities being held to
maturity and the estimated fair values of debt securities available for sale at
March 31, 2004 by contractual maturity are shown below. Expected maturities may
differ from contractual maturities because borrowers may have the right to call
or prepay obligations with or without penalties. Securities not due at a single
maturity date and securities embedded with call or prepayment options, such as
mortgage-backed securities, are included in the table below based on their
original final maturities.

<TABLE>
<CAPTION>
                                                                  Available-
                                        Held-to-maturity           for-sale
                                  ----------------------------- ---------------
                                    Amortized      Estimated      Estimated
                                      cost         fair value     fair value
                                  -------------- -------------- ---------------
                                                  (in millions)
 <S>                              <C>            <C>            <C>
 Due in one year or less......... (Yen)    6,623 (Yen)    6,625 (Yen) 8,082,904
 Due from one year to five years.      1,034,306      1,034,994       5,730,130
 Due from five years to ten years          5,851          5,851       1,184,162
 Due after ten years.............          5,413          5,192       2,148,857
                                  -------------- -------------- ---------------
 Total........................... (Yen)1,052,193 (Yen)1,052,662 (Yen)17,146,053
                                  ============== ============== ===============
</TABLE>

For the fiscal years ended March 31, 2002, 2003 and 2004, proceeds from sales
of securities available for sale were (Yen)30,670,994 million, (Yen)22,403,930
million and (Yen)21,657,326 million, respectively. For the fiscal years ended
March 31, 2002, 2003 and 2004, gross realized gains on those sales were
(Yen)305,884 million, (Yen)389,462 million and (Yen)408,732 million,
respectively, and gross realized losses on those sales were (Yen)75,311
million, (Yen)118,513 million and (Yen)195,499 million, respectively. In
September 2000, the Bank changed its intent to hold securities originally
classified as held-to-maturity and transferred (Yen)369,039 million at carrying
value of such securities to the available-for-sale category. As a result of the
transfer, unrealized gains on securities available for sale were recorded
against shareholder's equity and were not significant. The Bank classified
subsequent acquisitions of securities as either available for sale or trading
until the fiscal year ended March 31, 2003. On April 1, 2003, the Bank
reassessed the appropriateness of the classification of the securities which
had been classified as available for sale and reclassified (Yen)50,398 million
of such securities into the held-to-maturity category. The transfer did not
have a material impact on its financial position or result of operations.

For the fiscal years ended March 31, 2002, 2003 and 2004, losses resulting from
write-downs of investment securities that are classified as available-for-sale
to reflect the decline in value considered to be other than temporary were
(Yen)205,677 million, (Yen)241,635 million and (Yen)101, 938 million,
respectively, which were included in Investment securities gains (losses)--net
in the consolidated statements of operations.

                                     F-24

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


The following table shows the unrealized gross losses and fair values of
investment securities available for sale and being held to maturity at March
31, 2004, by length of time that individual securities in each category have
been in continuous loss position:

<TABLE>
<CAPTION>
                                           Less than 12 months       12 months or more                    Total
                                        -------------------------- ---------------------- -------------------------------------
                                            Fair       Unrealized     Fair     Unrealized     Fair       Unrealized  Number of
                                            value        losses       value      losses       value        losses    securities
                                        -------------- ----------- ----------- ---------- -------------- ----------- ----------
                                                                             (in millions)
<S>                                     <C>            <C>         <C>         <C>        <C>            <C>         <C>
Securities available for sale:
  Debt securities:
    Japanese national government and
     Japanese government agency
     bonds............................. (Yen)7,974,835 (Yen) 9,830 (Yen)    -- (Yen)   -- (Yen)7,974,835 (Yen) 9,830     34
    Foreign governments and official
     institutions bonds................        535,335       4,587          --         --        535,335       4,587     94
    Corporate bonds....................        153,246         601          --         --        153,246         601     45
    Mortgage-backed securities.........        349,681       4,553          14         --        349,695       4,553     96
    Other debt securities..............         15,786         152      13,746      2,325         29,532       2,477     46
  Marketable equity securities.........         13,977       1,206          --         --         13,977       1,206      3
                                        -------------- ----------- ----------- ---------- -------------- -----------    ---
Total.................................. (Yen)9,042,860 (Yen)20,929 (Yen)13,760 (Yen)2,325 (Yen)9,056,620 (Yen)23,254    318
                                        ============== =========== =========== ========== ============== ===========    ===
Securities being held to maturity--debt
 securities:
    Japanese national government and
     Japanese government agency
     bonds............................. (Yen)  349,118 (Yen) 1,218 (Yen)    -- (Yen)   -- (Yen)  349,118 (Yen) 1,218      3
    Corporate bonds....................          1,414           3          --         --          1,414           3      2
                                        -------------- ----------- ----------- ---------- -------------- -----------    ---
Total.................................. (Yen)  350,532 (Yen) 1,221 (Yen)    -- (Yen)   -- (Yen)  350,532 (Yen) 1,221      5
                                        ============== =========== =========== ========== ============== ===========    ===
</TABLE>

The Group holds various type of debt and equity securities as shown in the
table of investment securities in the beginning part of this Note. Although, as
shown in that table, dominant part of such investments are with unrealized
gains at March 31, 2004, certain security investments, primarily debt
securities available for sale, were with unrealized losses, most of which have
been in continuous loss for a period less than 12 months.

The Group has determined that unrealized losses on investments as of March 31,
2004 are temporary in nature based on its ability and intent to hold the
investment for a period of time sufficient to allow for any anticipated
recovery and the results of its review conducted to identify and evaluate
investments that have indications of possible impairments. The Bank's review
included consideration of the following criteria:

The length of time that fair value of the investment has been below cost--The
Group generally deems continued decline of fair value below cost for six months
or more to be other than temporary. Certain securities held by UnionBanCal
Corporation ("UNBC"), a U.S. subsidiary of the Bank, which primarily consists
of securities backed by the full faith and credit of the U.S. government and
corporate asset-backed and debt securities, were determined not to be impaired
in some cases, on the basis of a cash flow analysis of securities and/or UNBC's
ability to hold such securities to maturity.

As shown in the table above, there was no material unrealized losses that have
been in continuous loss position for 12 months or more, except for unrealized
losses on certain "Other debt securities" at March 31, 2004. "Other debt
securities" with unrealized loss position for 12 months or more were primarily
consisted of collateralized loan obligations held by UNBC. Unrealized losses on
such securities arise from rising interest rates, widening credit spreads,
credit quality of the underlying collateral, and the market's opinion of the
performance of the fund managers. Based on the cash flow analysis set out
above, such unrealized losses are determined temporary in nature.

                                     F-25

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


The extent to which the fair value of investments has been below cost as of the
end of the reporting period--The Group's investment portfolio is exposed to
volatile equity prices affected by many factors including investors'
perspectives as to future economic factors and the issuers' performance, as
well as cyclical market price fluctuation due to changes in market interest
rates, foreign exchange rates, and changes in credit spreads etc. In view of
the diversity and volume of equity investments as well as the fact that the
majority of investments in debt securities are in high-grade fixed-rate bonds,
including sovereign bonds, the Group generally deems the decline of fair value
below cost of 20% or more is a critical indicator of other-than-temporary
decline in fair value.

The financial condition and near-term prospects of the issuer--The Group
considers the financial condition and near-term prospects of the issuer
primarily based on the credit standing of the issuers as determined by its
credit rating system.

Exchange Traded Fund

For the fiscal years ended March 31, 2002, 2003 and 2004, the Bank transferred
marketable equity securities to an exchange traded fund ("ETF"), sponsored by a
securities firm. The Bank concurrently entered into sales agreements for
marketable equity securities and purchase agreements for the fund units of the
ETF with the securities firm. The Bank transferred its marketable equity
securities to the securities firm with an aggregate cost of (Yen)325,749
million for (Yen)391,698 million, an aggregate cost of (Yen)163,861 million for
(Yen)240,574 million and an aggregate cost of (Yen)54,366 million for
(Yen)76,385 million for the fiscal years ended March 31, 2002, 2003 and 2004,
respectively. The securities firm contributed these marketable equity
securities and additional securities purchased from the market to the ETF in
order to link the ETF performance to the TOPIX (a composite index of all stocks
listed on the First Section of the Tokyo Stock Exchange ("TSE")). Certificates
issued by the ETF (the "ETF certificates") are linked to the TOPIX and have
been listed on the TSE. The Bank purchased the ETF certificates at the fair
value of (Yen)527,967 million, (Yen)361,782 million and (Yen)113,930 million
for the fiscal years ended March 31, 2002, 2003 and 2004, respectively, with an
intention to sell them in the market or to the securities firm in the near
future.

The Bank accounted for the ETF certificates purchased from the securities firm
as retained interests in the marketable equity securities transferred to the
securities firm. The Bank accounted for the transfer of marketable equity
securities as a sale when the Bank received cash or financial instruments other
than the ETF certificates. For the fiscal years ended March 31, 2002, 2003 and
2004, the Bank recognized gains of (Yen)35,442 million, (Yen)41,883 million and
(Yen)89,581 million, respectively, on the sales of the ETF certificates. The
Bank held ETF certificates with fair values of (Yen)148,646 million at March
31, 2003 and nil at March 31, 2004 in Securities available for sale. The ETF
certificates are carried at fair value based on the market prices observed in
the TSE and the fair value change is closely linked with the movement of the
TOPIX.

Banks' Shareholdings Purchase Corporation

Under a law forbidding banks from holding marketable equity securities in
excess of their Tier I capital after September 30, 2006, the Banks'
Shareholdings Purchase Corporation ("BSPC") was established in January 2002 in
order to soften the impact on the stock market of sales of cross-shareholdings.
BSPC began accepting share offers from financial institutions on February 15,
2002. It has been funded by financial institutions, including the Bank, which
made initial contributions of (Yen)1,400 million ("preferred contributions").
BSPC will be disbanded when it sells all shares that it purchased from
financial institutions, or by March 31, 2017, at the latest.

BSPC has two accounts to purchase stock from financial institutions; the
General Account and the Special Account. In the General Account, each selling
financial institution funds the amount of purchase by BSPC without guarantees
by the Japanese government, and the financial institution will assume any gains
or losses on

                                     F-26

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

sales by BSPC of the stocks. In the Special Account, each selling financial
institution was required to make contributions of 8% of the selling prices to
BSPC for purchases made prior to the effective date of the amendment to the
above-mentioned law to fund any future losses ("subordinated contributions").
Effective in August 2003, the requirement of subordinated contributions was
eliminated under the amount to legislation. The purchase amount in the Special
Account is funded by borrowings guaranteed by the Japanese government with a
limit of (Yen)2.0 trillion. The cumulative net loss on sales of stocks in the
Special Account, which will not be determined and finalized before the
liquidation of BSPC, will be compensated first by the subordinated
contributions, and then by the preferred contributions. If there is a remaining
loss, the government, as a guarantor, will be liable for the loss. On the other
hand, if there is a cumulative net asset at the time of the liquidation, the
asset is first used to repay the preferred contributions and then to repay the
subordinated contributions. After that, if any remaining net assets after
repayment of subordinated contributions exists, such net assets will be paid
out and the amounts will be determined based on the amounts of both
contributions. Any remaining net assets in excess of double the amount of the
contributions will belong to the Japanese government.

At the establishment of BSPC in January 2002, the Bank paid (Yen)1,400 million
to BSPC as preferred contributions. The Bank sold marketable equity securities
with aggregate market values of (Yen)14,548 million, nil and (Yen)134,495
million, respectively, for the fiscal years ended March 31, 2002, 2003 and
2004. At the time of the sales, the Bank made subordinated contribution to the
Special Account of (Yen)1,164 million for the fiscal year ended March 31, 2002
and nil for the fiscal years ended March 31, 2003 and 2004. Also, the Bank made
loans to BSPC to fund its purchases of marketable equity securities. Such loans
to BSPC, which are guaranteed by the Japanese government, amounted to
(Yen)35,600 million, (Yen)79,735 million and (Yen)7,398 million, respectively,
at March 31, 2002, 2003 and 2004. For the fiscal year ended March 31, 2003, the
Bank evaluated its preferred contributions of (Yen)1,400 million and
subordinated contributions of (Yen)1,164 million for impairment, and recognized
an impairment loss of (Yen)2,564 million.

The Bank accounts for the transfers of marketable equity securities to the
General Account, if any, as secured borrowings. With respect to the transfers
of marketable equity securities to the Special Account with the requirement of
subordinated contributions, if the fair value of the securities sold to the
Special Account is greater than 10% of the fair value of all securities held by
the special account, the Group accounts for the subordinated contributions as a
partial retained interest in the sale. For all period presented, the Group made
no sales of securities whose fair value was greater than 10% of the fair value
of all securities held by the Special Account. For the fiscal years ended March
31, 2002, 2003 and 2004, the Bank recognized a gain of (Yen)3,511 million, nil
and (Yen)27,482 million, respectively, on the sale of marketable equity
securities to the Special Account.

The Bank of Japan

The Bank of Japan began purchasing marketable equity securities at fair value
from banks, including the Bank, from November 2002, aiming to enhance the
stability of the Japanese financial system by reducing the amount of marketable
equity securities on the balance sheets of banks. Transfers of securities to
the Bank of Japan are sales transactions without transferors' continuing
involvement. The Bank sold marketable equity securities to the Bank of Japan
with aggregate market values of (Yen)51,453 million and (Yen)38,553 million for
the fiscal years ended March 31, 2003 and 2004, respectively.

                                     F-27

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


5. LOANS

Loans at March 31, 2003 and 2004 by domicile and type of industry of borrower
are summarized below:

Classification of loan by industry is based on the industry segment loan
classification as defined by the Bank of Japan.

<TABLE>
<CAPTION>
                                                      2003               2004
                                                 --------------- ---------------
                                                            (in millions)
<S>                                              <C>             <C>
Domestic:
   Manufacturing................................ (Yen) 4,714,708 (Yen) 4,692,433
   Construction.................................         995,918         832,758
   Real estate..................................       3,245,721       3,515,717
   Services.....................................       4,249,086       3,661,758
   Wholesale and retail.........................       4,723,010       4,311,980
   Banks and other financial institutions.......       1,800,592       1,765,377
   Communication and information services.......       1,264,713         650,983
   Other industries.............................       2,644,775       4,750,575
   Consumer.....................................       6,994,224       7,473,998/(2)/
                                                 --------------- ---------------
       Total domestic...........................      30,632,747      31,655,579
                                                 --------------- ---------------
Foreign:
   Governments and official institutions........         227,685         178,402
   Banks and other financial institutions.......         777,697         904,841
   Commercial and industrial....................       8,127,334       7,063,034
   Other........................................         267,301         156,369
                                                 --------------- ---------------
       Total foreign............................       9,400,017       8,302,646
                                                 --------------- ---------------
Less unearned income and deferred loan fees--net          40,387          27,183
                                                 --------------- ---------------
       Total/(1)/............................... (Yen)39,992,377 (Yen)39,931,042
                                                 =============== ===============
</TABLE>
--------
Notes:
(1)The table includes loans held for sale of (Yen)3,360 million and (Yen)9,960
   million at March 31, 2003 and 2004, respectively.
(2)Domestic loans within the "consumer" category in the above table include
   loans to individuals who utilize loan proceeds to finance their proprietor
   activities and not for their personal financing needs. During the fiscal
   year ended March 31, 2004, the Bank's credit administration system was
   upgraded and the Bank is now able to present a precise breakdown of the
   balance of such consumer loans at March 31, 2004 by the type of proprietor
   business as presented below:

<TABLE>
<CAPTION>
                                                                  Banks and   Communication                 Total
                                                                    other          and                     included
                               Real                  Wholesale    financial    information    Other           in
Manufacturing Construction    estate      Services   and retail  institutions   services    industries     Consumer
------------- ------------ ------------ ------------ ----------- ------------ ------------- ----------- --------------
                                                    (in millions)
<S>           <C>          <C>          <C>          <C>         <C>          <C>           <C>         <C>
 (Yen)28,229  (Yen)19,283  (Yen)738,377 (Yen)230,730 (Yen)52,253  (Yen)1,200   (Yen)4,121   (Yen)10,620 (Yen)1,084,813
</TABLE>

   Since the system upgrade was effective during the fiscal year ended March
   31, 2004, no equivalent information is obtainable for prior fiscal year-end
   dates.

Substantially all domestic loans are made under agreements which, as is
customary in Japan, provide that a bank may, under certain conditions, require
the borrower to provide collateral (or additional collateral) or guarantees
with respect to the loans, and that the bank may treat any collateral, whether
furnished as security for loans or otherwise, as collateral for all
indebtedness to the bank. At March 31, 2003 and 2004, such collateralized loans
originated by the Group, which were principally collateralized by real estate,
marketable securities and accounts receivable, amounted to (Yen)5,859,822
million and (Yen)5,587,347 million, respectively, which represented 19% and
18%, respectively, of the total domestic loans at March 31, 2003 and 2004.

                                     F-28

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


Nonaccrual and restructured loans were (Yen)2,097,576 million and
(Yen)1,217,268 million at March 31, 2003 and 2004, respectively. Had interest
on these loans been accrued at the original terms of agreement, gross interest
income on such loans for the fiscal years ended March 31, 2003 and 2004 would
have been approximately (Yen)63.2 billion and (Yen)33.6 billion, respectively,
of which approximately (Yen)47.1 billion and (Yen)22.8 billion, respectively,
were included in interest income on loans in the accompanying consolidated
statements of operations. Accruing loans contractually past due 90 days or more
were (Yen)18,078 million and (Yen)11,979 million at March 31, 2003 and 2004,
respectively.

Impaired Loans

The Group's impaired loans primarily include nonaccrual loans and restructured
loans. A summary of the recorded balances of impaired loans and related
impairment allowance at March 31, 2003 and 2004 is shown below:

<TABLE>
<CAPTION>
                                                 2003                        2004
                                      --------------------------- ---------------------------
                                         Recorded     Impairment     Recorded     Impairment
                                       loan balance   allowance    loan balance   allowance
                                      -------------- ------------ -------------- ------------
                                                           (in millions)
<S>                                   <C>            <C>          <C>            <C>
Requiring an impairment allowance.... (Yen)1,855,556 (Yen)675,759 (Yen)  972,649 (Yen)380,934
Not requiring an impairment allowance        133,051           --        144,726           --
                                      -------------- ------------ -------------- ------------
Total................................ (Yen)1,988,607 (Yen)675,759 (Yen)1,117,375 (Yen)380,934
                                      ============== ============ ============== ============
</TABLE>
--------
Note:In addition to impaired loans presented in the above table, there were
     loans held for sale that were impaired of (Yen)3,185 million and
     (Yen)9,704 million at March 31, 2003 and 2004, respectively.

The average recorded investments in impaired loans were approximately
(Yen)3,204 billion, (Yen)2,555 billion and (Yen)1,542 billion, respectively,
for the fiscal years ended March 31, 2002, 2003 and 2004.

For the fiscal years ended March 31, 2002, 2003 and 2004, the Group recognized
interest income of approximately (Yen)62.7 billion, (Yen)56.9 billion and
(Yen)29.9 billion, respectively, on impaired loans. Interest income on
nonaccrual loans was recognized on a cash basis when ultimate collectibility of
principal is certain; otherwise, cash receipts are applied as principal
reductions. Interest income on accruing impaired loans, including restructured
loans, was recognized on an accrual basis to the extent that the collectibility
of interest income was reasonably certain based on management's assessment.

Lease Receivable

As part of its financing activities, the Bank enters into leasing arrangements
with customers. The Bank's leasing operations are performed through leasing
subsidiaries and consist principally of direct financing leases involving
various types of data processing equipment, office equipment and transportation
equipment.

As of March 31, 2003 and 2004, the components of the investment in direct
financing leases were as follows:

<TABLE>
<CAPTION>
                                                     2003          2004
                                                 ------------  ------------
                                                        (in millions)
    <S>                                          <C>           <C>
    Minimum lease payment receivable............ (Yen)683,034  (Yen)594,974
    Estimated residual values of leased property       64,537        61,100
    Less--unearned income.......................      (61,222)      (49,920)
                                                 ------------  ------------
    Net investment in direct financing leases... (Yen)686,349  (Yen)606,154
                                                 ============  ============
</TABLE>

                                     F-29

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


Future minimum lease payment receivables under noncancelable leasing agreements
as of March 31, 2004 are as follows:

<TABLE>
<CAPTION>
                                                        Direct
                                                       financing
                                                        leases
                                                     -------------
                                                     (in millions)
             <S>                                     <C>
             Fiscal year ending March 31:
                2005................................ (Yen)152,191
                2006................................      122,076
                2007................................       86,377
                2008................................       56,331
                2009................................       30,128
                2010 and thereafter.................      147,871
                                                     ------------
             Total minimum lease payment receivables (Yen)594,974
                                                     ============
</TABLE>

Government-led Loan Restructuring Program

Under the legislation enacted by the Japanese Diet in June 1996, which
incorporates the restructuring program for the loans of seven failed
housing-loan companies (the "Jusen"), the Deposit Insurance Corporation ("DIC")
established a Housing Loan Corporation ( "HLAC") to collect and dispose of the
loans of the liquidated Jusen. In 1999, HLAC merged with the Resolution and
Collection Bank Limited to create the Resolution and Collection Corporation
("RCC"), which is wholly owned by the DIC.

Financial institutions, including the Group, waived the repayment of
substantial amounts of the loans to the Jusen and transferred the remaining
balances to HLAC. Financial institutions were requested to make loans to HLAC
to finance its collection activities, and in the fiscal year ended March 31,
1997, the Group made loans of (Yen)184,197 million with an original maturity
term of 15 years, which were included in the loan portfolio as of March 31,
2003 and 2004. As of March 31, 2003 and 2004, the Group had loans of
(Yen)171,160 million. The 15-year term loans to HLAC, which are guaranteed by
the DIC under the legislation and the loan agreements, mature in 2011 and earn
interest at TIBOR (Tokyo Interbank Offered Rate) plus 0.125%.

Under this restructuring program, a Financial Stabilization Fund (the "Special
Fund") was established within the DIC, and the Bank of Japan and other
financial institutions established another fund (the "New Fund"). These funds
are principally invested in Japanese government bonds. The Group made
non-interest-earning deposits of (Yen)111,124 million with the Special Fund and
the New Fund in the fiscal year ended March 31, 1997. The deposit balances as
of March 31, 2003 and 2004, which are included in Other Assets, were
(Yen)79,528 million and (Yen)82,104 million, respectively, reflecting a present
value discount and subsequent amortization of the discount during the period
until the expected maturity date. The non-interest-earning deposits with these
funds are expected to mature in 15 years from the deposit dates, which
coincides with the planned operational lifespan of HLAC.

It is uncertain what losses (so-called "stage two loss"), if any, may
ultimately be incurred by RCC through the collection of the Jusen loans during
the 15-year term. If any such losses ultimately occur, the Japanese government
will be liable for half of such losses, and the investment income to be earned
by the Special Fund during the 15 years is to be used to cover the remaining
half of the losses. The investment income to be earned by the New Fund during
the 15 years is used to compensate for a portion of the public funds used for
the Jusen restructuring.

At this time management believes all loans and deposits will be collectible
according to their respective terms.

                                     F-30

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


Sales of Loans

The Group originates various of types loans to corporate and individual
customers in Japan and overseas in the normal course of its business. The
Financial Services Agency of Japan (the "FSA") announced in October 2002 that
it will strive to reduce the aggregate ratio of nonperforming credits to total
credits of major Japanese banks, including the Group, by approximately half by
March 31, 2005. Pursuant to the FSA's policy and in order to improve its loan
quality, the Group actively disposed of nonperforming loans. Most of such
nonperforming loans were disposed of by sales to third party purchasers
including RCC without any continuing involvement. Management of the Group
generally decides on approvals for disposals after significant sales terms,
including prices, are negotiated. As such, loans are disposed of by sales
shortly after the loans are transferred to held-for-sale classification. For
the fiscal years ended March 31, 2002 and 2003, the losses on sales of loans,
which represents an additional provision for credit losses on, were (Yen)14,864
million and (Yen)37,173 million, respectively. The gain on sales of loans was
(Yen)5,479 million for the fiscal year ended March 31, 2004. Such losses and
gain are included in the provision (credit) for credit losses in the
accompanying consolidated statements of operations.

Loan Securitization

The Group had no significant transfers of loans in securitization transactions
accounted for as sales for the fiscal years ended March 31, 2002, 2003 and
2004, and did not retain any significant interests associated with loans
transferred in securitizations at March 31, 2003 and 2004.

Related party loans

In some cases, the Bank and its banking subsidiaries make loans to related
parties, including their directors and executive officers, in the course of
their normal commercial banking business. At March 31, 2003 and 2004,
outstanding loans to such related parties were not significant.

In the opinion of management, these related party loans were made on
substantially the same terms, including interest rates and collateral
requirements, as those terms prevailing at the date these loans were made. For
the fiscal years ended March 31, 2002, 2003 and 2004, there were no loans to
related parties that were charged-off. Additionally, at March 31, 2003 and
2004, there were no loans to related parties that were impaired.

6. ALLOWANCE FOR CREDIT LOSSES

Changes in the allowance for credit losses for the fiscal years ended March 31,
2002, 2003 and 2004 are shown below:

<TABLE>
<CAPTION>
                                          2002            2003           2004
                                     --------------  -------------- --------------
                                                     (in millions)
<S>                                  <C>             <C>            <C>
Balance at beginning of fiscal year. (Yen)1,385,010  (Yen)1,341,608 (Yen)1,058,633
                                     --------------  -------------- --------------
Provision (credit) for credit losses        466,947         287,282       (142,362)
                                     --------------  -------------- --------------
Charge-offs.........................        513,989         640,122        277,713
Less--Recoveries....................         48,809          66,648         30,036
                                     --------------  -------------- --------------
Net charge-offs.....................        465,180         573,474        247,677
                                     --------------  -------------- --------------
Others..............................         12,333           3,217        (19,248)
Deconsolidation of Nippon Trust Bank        (57,502)             --             --
                                     --------------  -------------- --------------
Balance at end of fiscal year....... (Yen)1,341,608  (Yen)1,058,633 (Yen)  649,346
                                     ==============  ============== ==============
</TABLE>
--------
Note:Others principally include foreign exchange translation and discontinued
     operations adjustments.

                                     F-31

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


As explained in Note 5, nonperforming loans were actively disposed of by sales
during recent years. The allocated allowance for credit losses for such loans
were removed from the allowance for credit losses and transferred to the
valuation allowance for loan held for sale upon a decision to sell. Net
charge-offs in the above table include the decrease in the allowance for credit
losses due to loan disposal activity amounting to (Yen)144.1 billion,
(Yen)310.7 billion and (Yen)120.1 billion for the fiscal years ended March 31,
2002, 2003 and 2004, respectively.

7. PREMISES AND EQUIPMENT

Premises and equipment at March 31, 2003 and 2004 consisted of the following:

<TABLE>
<CAPTION>
                                             2003           2004
                                        -------------- --------------
                                                (in millions)
          <S>                           <C>            <C>
          Land......................... (Yen)  112,808 (Yen)   96,802
          Buildings....................        320,808        319,088
          Equipment and furniture......        435,973        394,419
          Leasehold improvements.......        215,822        205,538
          Construction in progress.....         12,057          4,136
                                        -------------- --------------
             Total.....................      1,097,468      1,019,983
          Less accumulated depreciation        611,903        585,460
                                        -------------- --------------
          Premises and equipment--net.. (Yen)  485,565 (Yen)  434,523
                                        ============== ==============
</TABLE>

Premises and equipment include capitalized leases, principally related to data
processing equipment, which amounted to (Yen)37,083 million and (Yen)39,813
million at March 31, 2003 and 2004, respectively. Accumulated depreciation on
such capitalized leases at March 31, 2003 and 2004 amounted to (Yen)21,295
million and (Yen)26,239 million, respectively.

Depreciation expense of premises and equipment for the fiscal years ended March
31, 2002, 2003 and 2004 was (Yen)59,552 million, (Yen)53,950 million and
(Yen)48,179 million, respectively.

In March 1999, the Bank sold a 50% undivided interest in its head office land
and building (including structure and equipment) for (Yen)91,500 million and in
its main office land and building (including structure and equipment) for
(Yen)9,100 million to a real estate company. At the same time, the Bank entered
an agreement to lease back the 50% undivided interest in the buildings sold
from the buyer over a period of 7 years. The Bank accounted for these
transactions as financing arrangements, and recorded the total proceeds of
(Yen)100,600 million as a financing obligation. Under the lease agreement, the
Bank made non-interest-bearing deposits of (Yen)8,000 million with the
buyer-lessor in March 1999. The lease payments are determined each year upon
negotiations with the buyer-lessor, based on future market conditions and
expenditures for significant improvements and the related expenses of the
buildings to be born by the buyer-lessor. The lease agreement is noncancelable
during the lease period of 7 years. At the end of the lease, the Bank has no
obligations or options specified in the lease agreement.

At March 31, 2003 and 2004, the financing obligation was (Yen)102,208 million
and (Yen)102,795 million, respectively, and total rental payments amounted to
(Yen)6,190 million and (Yen)6,371 million, respectively, for the fiscal years
ended March 31, 2003 and 2004.

For the fiscal years ended March 31, 2003 and 2004, the Group recognized
(Yen)11,112 million and (Yen)5,377 million of impairment losses for long-lived
assets, primarily domestic real estate which was either assets formerly used

                                     F-32

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

for its domestic banking operations that are no longer used or assets that are
used without recoverability of carrying amount. In addition, (Yen)415 million
and (Yen)1,832 million of impairment losses were recognized for real estate
held for sale for the fiscal years ended March 31, 2003 and 2004. These losses
are included in Other non-interest expenses. In computing the amount of
impairment losses, fair value was determined primarily based on market prices,
if any, or the estimated price based on an appraisal.

8. GOODWILL AND OTHER INTANGIBLE ASSETS

As discussed in Note 1, on April 1, 2002, the Group adopted SFAS No. 142 which
requires that goodwill, formerly subject to amortization, no longer be
amortized and be tested for impairment at least annually. Further, SFAS No. 142
requires that intangible assets with finite useful lives continue to be
amortized over their useful lives while intangible assets with indefinite lives
no longer be amortized but rather are subject to impairment testing at least
annually.

On April 1, 2002, the Group has performed the required transitional impairment
tests of goodwill and intangible assets with indefinite lives upon adoption of
SFAS No. 142. The initial adoption resulted in a cumulative adjustment charge
to earnings of (Yen)532 million related to the impairment of goodwill. Such
cumulative adjustment primarily resulted from an impairment of goodwill related
to a U.S. leasing business and was measured using the discounted future cash
flow method. Intangible assets with indefinite lives, which were amortized in
the prior periods, were immaterial.

Goodwill

The changes in the carrying amount of goodwill by business segment during the
fiscal years ended March 31, 2003 and 2004 were as follows:

<TABLE>
<CAPTION>
                                                        Global
                                                       Corporate Investment Mitsubishi
                                                        Banking   Banking   Securities     UNBC        Total
                                                       --------- ---------- ---------- -----------  -----------
                                                                             (in millions)
<S>                                                    <C>       <C>        <C>        <C>          <C>
For the fiscal year ended March 31, 2003
Balance at March 31, 2002............................. (Yen) 23  (Yen) 509  (Yen)  --  (Yen)11,169  (Yen)11,701
Impairment recognized by the transitional impairment
  test................................................      (23)      (509)        --           --         (532)
Goodwill acquired during the fiscal year..............       --         --        383        9,646       10,029
Reclassified to core deposit intangible...............       --         --         --       (1,799)      (1,799)
Foreign currency translation adjustments and other....       --         --         --         (966)        (966)
                                                       --------  ---------  ---------  -----------  -----------
Balance at March 31, 2003............................. (Yen) --  (Yen)  --  (Yen) 383  (Yen)18,050  (Yen)18,433
                                                       ========  =========  =========  ===========  ===========
For the fiscal year ended March 31, 2004
Balance at March 31, 2003............................. (Yen) --  (Yen)  --  (Yen) 383  (Yen)18,050  (Yen)18,433
Goodwill acquired during the fiscal year..............       --         --         --       10,876       10,876
Goodwill written off related to sale of business units       --         --       (280)          --         (280)
Foreign currency translation adjustments and other....       --         --         --       (2,119)      (2,119)
                                                       --------  ---------  ---------  -----------  -----------
Balance at March 31, 2004............................. (Yen) --  (Yen)  --  (Yen) 103  (Yen)26,807  (Yen)26,910
                                                       ========  =========  =========  ===========  ===========
</TABLE>

See Note 27 for the business segment information of the Group.

                                     F-33

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


Net income (loss) and amounts per common share for the fiscal years ended March
31, 2002, 2003 and 2004 adjusted to exclude amortization expense related to
goodwill were as follows:

<TABLE>
<CAPTION>
                                                                                  2002          2003         2004
                                                                             -------------  ------------ ------------
<S>                                                                          <C>            <C>          <C>
Net income (loss) (in millions):
Reported income (loss)...................................................... (Yen)(132,671) (Yen)248,978 (Yen)537,601
Goodwill amortization.......................................................         4,571            --           --
                                                                             -------------  ------------ ------------
Adjusted net income (loss).................................................. (Yen)(128,100) (Yen)248,978 (Yen)537,601
                                                                             =============  ============ ============
Basic earnings (loss) per share (in yen):
Reported basic earnings (loss) per share--net income (loss) available to a
  common shareholder........................................................ (Yen)  (29.82) (Yen)  52.49 (Yen) 105.10
Goodwill amortization.......................................................          1.03            --           --
                                                                             -------------  ------------ ------------
Adjusted basic earnings (loss) per share--net income (loss) available to a
  common shareholder........................................................ (Yen)  (28.79) (Yen)  52.49 (Yen) 105.10
                                                                             =============  ============ ============
Diluted earnings (loss) per share (in yen):
Reported diluted earnings (loss) per share--net income (loss) available to a
  common shareholder........................................................ (Yen)  (29.82) (Yen)  49.11 (Yen) 104.81
Goodwill amortization.......................................................          1.03            --           --
                                                                             -------------  ------------ ------------
Adjusted diluted earnings (loss) per share--net income (loss) available to a
  common shareholder........................................................ (Yen)  (28.79) (Yen)  49.11 (Yen) 104.81
                                                                             =============  ============ ============
</TABLE>

Other intangible assets

The table below presents the gross carrying amount, accumulated amortization
and net carrying amount, in total and by major class of intangible assets at
March 31, 2003 and 2004:

<TABLE>
<CAPTION>
                                                                2003                                     2004
                                              ---------------------------------------- ----------------------------------------
                                              Gross carrying Accumulated  Net carrying Gross carrying Accumulated  Net carrying
                                                  amount     amortization    amount        amount     amortization    amount
                                              -------------- ------------ ------------ -------------- ------------ ------------
                                                                                (in millions)
<S>                                           <C>            <C>          <C>          <C>            <C>          <C>
Intangible assets subject to amortization:
    Software.................................  (Yen)300,084  (Yen)171,223 (Yen)128,861  (Yen)331,741  (Yen)149,668 (Yen)182,073
    Core deposit intangible..................         5,177         3,664        1,513         4,041         1,672        2,369
    Other....................................         7,503         3,156        4,347         9,106         5,206        3,900
                                               ------------  ------------ ------------  ------------  ------------ ------------
       Total.................................  (Yen)312,764  (Yen)178,043      134,721  (Yen)344,888  (Yen)156,546      188,342
                                               ============  ============               ============  ============
Intangible assets recorded in connection with
 the additional minimum pension liabilities
 under SFAS No.87 (See Note 15)..............                                    5,626                                    2,776
Intangible assets not subject to
 amortization................................                                    7,360                                    7,188
                                                                          ------------                             ------------
Total........................................                             (Yen)147,707                             (Yen)198,306
                                                                          ============                             ============
</TABLE>

Intangible assets subject to amortization acquired during the fiscal year ended
March 31, 2004 amounted (Yen)104,914 million, which primarily consist of
capitalized cost of software. The weighted average amortization period for
capitalized software is five years, and the amount of its residual value is
immaterial.

                                     F-34

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


The estimated aggregate amortization expense for intangible assets for the next
five fiscal years is as follows:

<TABLE>
<CAPTION>
                                                (in millions)
                                                -------------
                   <S>                          <C>
                   Fiscal year ending March 31,
                      2005.....................  (Yen)52,656
                      2006.....................       47,239
                      2007.....................       34,468
                      2008.....................       23,719
                      2009.....................       10,956
</TABLE>

9. INCOME TAXES

The detail of current and deferred income tax expense (benefit) for the fiscal
years ended March 31, 2002, 2003 and 2004 was as follows:

<TABLE>
<CAPTION>
                                                                                2002           2003          2004
                                                                           -------------  -------------  ------------
                                                                                          (in millions)
<S>                                                                        <C>            <C>            <C>
Current:
   Domestic............................................................... (Yen)  (8,938) (Yen)  18,929  (Yen) (3,324)
   Foreign................................................................        35,982         41,845        48,570
                                                                           -------------  -------------  ------------
       Total..............................................................        27,044         60,774        45,246
                                                                           -------------  -------------  ------------
Deferred:
   Domestic...............................................................       (89,416)       (25,755)      276,127
   Foreign................................................................       (14,185)        15,416        12,239
                                                                           -------------  -------------  ------------
       Total..............................................................      (103,601)       (10,339)      288,366
                                                                           -------------  -------------  ------------
   Income tax expense (benefit)...........................................       (76,557)        50,435       333,612
                                                                           -------------  -------------  ------------
Income tax expense (benefit) reported in discontinued operations..........        (2,951)       (26,597)          744
                                                                           -------------  -------------  ------------
Income tax expense reported in cumulative effect of a change in accounting
  principle...............................................................         3,523             --            --
                                                                           -------------  -------------  ------------
Income tax expense (benefit) reported in shareholder's equity relating to:
   Investment securities available for sale...............................      (179,317)      (256,383)      252,131
   Cumulative effect of a change in accounting principle..................           808             --            --
   Derivatives qualifying for cash flow hedges............................         1,289            513        (1,789)
   Minimum pension liability adjustments..................................       (35,750)       (34,295)       30,804
   Foreign currency translation adjustments...............................         4,714         (3,299)       (4,324)
                                                                           -------------  -------------  ------------
       Total..............................................................      (208,256)      (293,464)      276,822
                                                                           -------------  -------------  ------------
Total..................................................................... (Yen)(284,241) (Yen)(269,626) (Yen)611,178
                                                                           =============  =============  ============
</TABLE>

Income taxes in Japan applicable to the Group are imposed by the national,
prefectural and municipal governments, and in the aggregate resulted in a
normal effective statutory rate of approximately 38.0% for the fiscal years
ended March 31, 2002, 2003 and 2004. Foreign subsidiaries are subject to income
taxes of the countries in which they operate.

                                     F-35

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


In March 2003, MTFG's application to file its tax returns under the
consolidated corporate-tax system was approved by the Japanese tax authorities,
and the consolidated corporate-tax system has become effective for the fiscal
year ended March 31, 2003. At March 31, 2003 and 2004, the tax-related
receivable from (payable to) MTFG, which was included in other assets
(liabilities), were (Yen)8,109 million and (Yen)(31,212) million, respectively.
The Group, however, has used the separate return method of allocation. Under
the separate return method of allocation, current and deferred taxes for the
fiscal years ended March 31, 2003 and 2004 was determined by applying the
requirements of FASB No. 109 as if the Group was filing a separate tax return.
Although the consolidated tax system requires to pay, for the fiscal years
ended March 31, 2003 and 2004, a surcharge tax of 2.0% of taxable income in
addition to the national corporate income tax rate. The Group reflected a tax
provision calculated on the separate tax return basis and the combined normal
effective statutory tax rate of the Group did not change. The difference
between the cash flows that are to be paid or received under the Japanese tax
law and the separate return method of tax allocation used for financial
reporting purposes is reported in the financial statements as either a charge
to retained earnings or a credit to paid-in capital.

On March 30, 2000, the Tokyo Metropolitan Assembly passed a new tax rule that
changed the basis on which it taxes large banks conducting business in Tokyo.
The Bank is subject to the new rule. The new rule requires large banks to pay a
3.0% local tax on their gross operating income derived from their Tokyo
operations for a period of five fiscal years commencing April 1, 2000.

On May 30, 2000, the Osaka Prefectural Assembly also passed a new tax rule that
is substantially the same as the rule approved by the Tokyo Metropolitan
Assembly. The new rule requires large banks to pay a 3.0% local tax on their
gross operating income derived from Osaka operations for a period of five
fiscal years commencing April 1, 2001.

The banks subject to the new tax rule, including the Bank, filed a complaint in
October 2000 with the Tokyo District Court, calling for nullification of the
new tax, which they claimed, unfairly targets banks. On March 26, 2002, the
Tokyo District Court rejected the new tax enacted by the Tokyo Metropolitan
Assembly. The court ordered the Tokyo Metropolitan Government to refund
(Yen)72.4 billion in tax payments to 18 major banks and to pay an additional
(Yen)1.8 billion in compensation.

On March 29, 2002, the Metropolitan Government lodged an appeal at the Tokyo
High Court. Following the decision of the Tokyo District Court, 16 major banks
filed a lawsuit on April 4, 2002 with the Osaka District Court against the
Osaka Prefectural Government, seeking to nullify the new tax rule. In response
to the lawsuit, on May 30, 2002, the Osaka Prefectural Government enacted a
revised tax rule that changed the taxation for the fiscal year ended March 31,
2002 and the years subject to the new tax rule. Under the revised tax rule, for
the fiscal years ended March 31, 2002 and 2003, large banks became subject to
local taxes based on the lower of the 3.0% local tax on their gross operating
income or the local tax computed based on net income. As a result of the
revisions, the Bank did not pay any local taxes to the Osaka Prefectural
Government for the fiscal years ended March 31, 2002, 2003 and 2004. The Bank
incurred new local taxes to the Tokyo Metropolitan Government of (Yen)14.7
billion, (Yen)14.6 billion and (Yen)15.0 billion for the fiscal years ended
March 31, 2001, 2002 and 2003, respectively. Had the Bank paid the local taxes
based on net income under the former rule, tax expense would have been (Yen)6.6
billion for the year ended March 31, 2001, and zero for the fiscal years ended
March 31, 2002 and 2003.

On January 30, 2003, the Tokyo High Court also rejected the new tax rule and
ordered the Tokyo Metropolitan Government to refund tax payments that the banks
had paid over the past two years, which represents the difference between the
3.0% tax on the gross operating profits paid by the banks and the amount
computed based on net income under the former rule. The order includes the
refund of (Yen)21.8 billion to the Bank. However, the

                                     F-36

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Tokyo High Court reversed the lower court on the issue of additional
compensation. The Tokyo Metropolitan Government appealed this decision to the
Supreme Court of Japan.

On October 8, 2003, the Bank entered into a settlement-at-court with the Tokyo
Metropolitan Government and the Tokyo Governor and withdrew their complaints
regarding the Tokyo Metropolitan Government's local tax on large banks. The
settlement included (a) a revision of the applicable tax rate to 0.9% from
3.0%, effective retroactive to the date of enactment of the local tax in the
fiscal year ended March 31, 2001 and (b) a refund representing the difference
between the amount already paid by the banks and the amount computed based on
the newly enacted rate plus accrued interest. On October 7, 2003, the Bank
received a tax refund plus accrued interest amounting to (Yen)32,141 million.

In March 2003, the Japanese government amended the local tax law. Under the
amended local tax law, a corporation size-based enterprise tax will be
effective, which will supersede the current enterprise tax, including the local
taxes levied by the Tokyo Metropolitan Government and Osaka Prefectural
Government, from the fiscal year ending March 31, 2005. As a result, the normal
effective statutory tax rate for the fiscal year ending March 31, 2005 will be
approximately 40.5%. The newly enacted rates were used in calculating the
future expected tax effects of temporary differences as of March 31, 2003 that
are expected to reverse during and subsequent to the fiscal year ending March
31, 2005. The change in tax rate resulted in a decrease of (Yen)63,938 million
in income tax expense for the fiscal year ended March 31, 2003.

Furthermore, in October 2003, the Tokyo Metropolitan Government and the Osaka
Prefectural Government enacted a surcharge tax of corporation sized based
enterprise tax under the local tax law amended in March 2003. As a result, the
normal effective statutory tax rate will increase approximately 0.1% to
approximately 40.6% effective for the fiscal year ending March 31, 2005. The
change in tax rate, used in calculating the future expected tax effects of
temporary differences, resulted in a decrease of (Yen)2,496 million in income
tax expense for the fiscal year ended March 31, 2004.

A reconciliation of the effective income tax rate reflected in the accompanying
consolidated statements of operations to the combined normal effective
statutory tax rate for the fiscal years ended March 31, 2002, 2003 and 2004 was
as follows:

<TABLE>
<CAPTION>
                                                                         2002   2003   2004
                                                                        -----  -----  -----
<S>                                                                     <C>    <C>    <C>
Combined normal effective statutory tax rate...........................  38.0%  38.0% 38.0%
Increase (decrease) in taxes resulting from:
   Nondeductible expenses..............................................   0.3    3.0   0.1
   Goodwill amortization...............................................   0.8     --    --
   Dividends from foreign subsidiaries.................................   3.8    3.5   0.9
   Foreign tax credit and payments.....................................  (2.4)   7.9   0.7
   Higher (lower) tax rates applicable to income of subsidiaries.......  (4.3)  (0.6)  0.3
   Foreign income exempted for income tax purpose......................  (0.8)    --    --
   Foreign tax assessment (refund).....................................  (1.0)  (1.1)   --
   Minority interest...................................................   4.0    1.1   1.9
   Change in valuation allowance.......................................  18.4    2.1  (4.9)
   Enacted change in tax rates.........................................    --  (22.1) (0.3)
   Realization of previously unrecognized tax benefits of subsidiaries. (16.9) (14.3) (1.7)
   Change in foreign exchange rate.....................................   0.3   (0.2)  1.5
   Other--net..........................................................   0.4    0.1   1.8
                                                                        -----  -----  ----
Effective income tax rate..............................................  35.4%  17.4% 38.3%
                                                                        =====  =====  ====
</TABLE>

                                     F-37

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


In calculating the effective income tax rate for the fiscal years ended March
31, 2002, the reconciling items were subtracted from the combined normal
effective statutory tax rate since loss before income tax benefit was recorded
in the fiscal year.

Deferred tax assets and liabilities are computed for each tax jurisdiction
using current enacted tax rates applicable to periods when the temporary
differences are expected to reverse. The tax effects of the items comprising
the Group's net deferred tax assets at March 31, 2003 and 2004 were as follows:

<TABLE>
<CAPTION>
                                                                                   2003            2004
                                                                              --------------  --------------
                                                                                       (in millions)
<S>                                                                           <C>             <C>
Deferred tax assets:
   Allowance for credit losses............................................... (Yen)  522,984  (Yen)  347,116
   Net operating loss carryforwards..........................................        651,459         532,263
   Accrued severance indemnities and pension liabilities.....................        135,223         108,231
   Investment securities.....................................................        127,562              --
   Non-interest-earning deposits with the Special Fund and the New Fund (See
     Note 5).................................................................          9,963           9,006
   Other real estate owned...................................................            223             205
   Accrued liabilities and other.............................................         59,388          82,199
   Sale-and-leaseback transactions...........................................         38,885          38,975
   Depreciation..............................................................         10,657          16,806
   Valuation allowance.......................................................       (167,421)       (108,256)
                                                                              --------------  --------------
       Total deferred tax assets.............................................      1,388,923       1,026,545
                                                                              --------------  --------------
Deferred tax liabilities:
   Investment securities.....................................................             --         226,706
   Deferred profit on property for income tax purposes.......................         11,272           8,344
   Equipment and auto leasing................................................         96,858          81,722
   Derivative financial instruments..........................................         25,780              --
   Other.....................................................................          5,510          20,382
                                                                              --------------  --------------
       Total deferred tax liabilities........................................        139,420         337,154
                                                                              --------------  --------------
Net deferred tax assets...................................................... (Yen)1,249,503  (Yen)  689,391
                                                                              ==============  ==============
</TABLE>

The valuation allowance was provided primarily against deferred tax assets
recorded at the Group's domestic subsidiaries with operating loss
carryforwards. The net changes in the valuation allowance for deferred income
tax assets were an increase of (Yen)32,235 million and a decrease of
(Yen)59,165 million for the fiscal years ended March 31, 2003 and 2004,
respectively, which primarily reflected an increase or a decrease in such
operating loss carryforwards of these subsidiaries.

                                     F-38

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


At March 31, 2004, the Group had operating loss carryforwards of (Yen)1,298,958
million and tax credit carryforwards of (Yen)489 million for tax purposes. Such
carryforwards, if not utilized, are scheduled to expire as follows:

<TABLE>
<CAPTION>
                                        Operating loss  Tax credit
                                        carryforwards  carryforwards
                                        -------------- -------------
                                               (in millions)
           <S>                          <C>            <C>
           Fiscal year ending March 31:
              2005..................... (Yen)    1,535 (Yen)     --
              2006.....................         45,044           --
              2007.....................             41           --
              2008.....................            128           --
              2009.....................         39,675           --
              2010.....................      1,145,529           --
              2011 and thereafter......         48,587          386
           No definite expiration date.         18,419          103
                                        -------------- ------------
                  Total................ (Yen)1,298,958 (Yen)    489
                                        ============== ============
</TABLE>

In March 2004, the Japanese government extended the period for operating loss
carryforwards from 5 years to 7 years under the corporate tax law. This applied
retroactively to operating loss carryforwards since fiscal years beginning on
or after April 1, 2001.

Income taxes are not provided on undistributed earnings of foreign
subsidiaries, which are considered to be indefinitely reinvested in the
operations of such subsidiaries. At March 31, 2004, such undistributed earnings
of foreign subsidiaries amounted to approximately (Yen)281 billion.
Determination of the amount of unrecognized deferred tax liabilities with
respect to these undistributed earnings is not practicable because of the
complexity associated with its hypothetical calculation including foreign
withholding taxes and foreign tax credits. The Bank has neither plans nor the
intention of disposing of investments in foreign subsidiaries and, accordingly,
does not expect to record capital gains or losses, or otherwise monetize its
foreign subsidiaries' undistributed earnings. Rather, the Bank will receive a
return on investments in foreign subsidiaries by way of dividends.

Income (loss) from continuing operations before income tax expense (benefit)
and cumulative effect of a change in accounting principle for the fiscal years
ended March 31, 2002, 2003 and 2004 was as follows:

<TABLE>
<CAPTION>
                                    2002          2003         2004
                               -------------  ------------ ------------
                                            (in millions)
        <S>                    <C>            <C>          <C>
        Domestic income (loss) (Yen)(290,689) (Yen)206,956 (Yen)791,531
        Foreign income........        74,359        82,619       80,267
                               -------------  ------------ ------------
           Total.............. (Yen)(216,330) (Yen)289,575 (Yen)871,798
                               =============  ============ ============
</TABLE>

10. PLEDGED ASSETS AND COLLATERAL

Pledged Assets

At March 31, 2004, assets mortgaged, pledged, or otherwise subject to lien were
as follows:

<TABLE>
<CAPTION>
                                              (in millions)
                                              --------------
                   <S>                        <C>
                   Due from banks............ (Yen)       76
                   Trading account securities      2,234,751
                   Investment securities.....        826,841
                   Loans.....................      3,998,066
                   Other.....................         18,891
                                              --------------
                      Total.................. (Yen)7,078,625
                                              ==============
</TABLE>

                                     F-39

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


The above pledged assets are classified by type of liabilities to which they
relate as follows:

<TABLE>
<CAPTION>
                                                                         (in millions)
                                                                         --------------
<S>                                                                      <C>
Deposits................................................................ (Yen)  265,636
Call money and funds purchased..........................................        576,600
Payables under repurchase agreements and securities lending transactions      2,372,298
Other short-term borrowings and long-term debt..........................      3,853,519
Other...................................................................         10,572
                                                                         --------------
   Total................................................................ (Yen)7,078,625
                                                                         ==============
</TABLE>

In addition, at March 31, 2004, certain investment securities, principally
Japanese national government and Japanese government agency bonds, aggregating
(Yen)3,804,262 million were pledged as collateral for acting as a collection
agent of public funds, for settlement of exchange at the Bank of Japan and
Tokyo Bankers Association, for derivative transactions and for certain other
purposes.

Under Japanese law, Japanese banks are required to maintain certain minimum
reserves on deposit with the Bank of Japan based on the amount of deposit
balances and certain other factors. There are similar reserve deposit
requirements for foreign offices engaged in banking businesses in foreign
countries. At March 31, 2003 and 2004, the reserve funds maintained by the
Group, which are included in Cash and Due from Banks and Interest-earning
Deposits in Other Banks, were (Yen)2,408,184 million and (Yen)1,741,151
million, respectively. Average reserves during the fiscal years ended March 31,
2003 and 2004 were (Yen)1,191,727 million and (Yen)3,232,924 million,
respectively.

Collateral

The Group accepts and provides financial assets as collateral for transactions,
principally commercial loans, repurchase agreements and securities lending
transactions, call money, and derivatives. Financial assets eligible for such
collateral include, among others, marketable equity securities, trade and note
receivables and certificates of deposit.

Secured parties, including creditors and counterparties to certain transactions
with the Group, may sell or repledge financial assets provided as collateral.
Certain contracts, however, may not be specific about the secured party's right
to sell or repledge collateral under the applicable statutes and, therefore,
whether or not the secured party is permitted to sell or repledge a collateral
would differ depending on the interpretations of specific provisions of the
existing statutes, contract or certain market practices. If the Group
determines, based on available information, that a financial asset provided as
collateral might not be sold or repledged by the secured parties, such
collateral is not separately reported in the consolidated balance sheets. If a
secured party is permitted to sell or repledge financial assets provided as
collateral by contract or custom under the existing statutes, the Group reports
such pledged financial assets separately on the face of the consolidated
balance sheets. At March 31, 2004, the Group pledged (Yen)7,044 billion of
collateral that may not be sold or repledged by the secured parties.

The Group accepts collateral for commercial loans and certain banking
transactions under a standardized agreement with customers, which provides that
the Group may require the customer to provide collateral or guarantees with
respect to the loans and other banking transactions. Financial assets pledged
as collateral are generally negotiable and transferable instruments, and such
negotiability and transferability is authorized by applicable legislation. In
principle, Japanese legislation permits the Group to repledge financial assets
accepted as collateral unless otherwise prohibited by contract or relevant
statutes. Nevertheless, the Group did not sell or repledge nor does it plan to
sell or repledge such collateral accepted in connection with commercial loans
before

                                     F-40

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

a debtor's default or other credit events specified in the agreements as it is
not customary within the banking industry in Japan to dispose of collateral
before a debtor's default and other specified credit events. Derivative
agreements commonly used in the marketplace do not prohibit a secured party's
disposition of financial assets received as collateral, and in resale
agreements and securities borrowing transactions, securities accepted as
collateral may be sold or repledged by the secured parties. At March 31, 2004,
the fair value of the collateral accepted by the Group that is permitted to be
sold or repledged was approximately (Yen)9,895 billion, of which approximately
(Yen)5,128 billion was sold or repledged. The amount includes the collateral
that may be repledged under the current Japanese legislation but the Group does
not dispose of before counterparties' default in accordance with the customary
practice within the Japanese banking industry.

11. DEPOSITS

The balances of time deposits, including certificates of deposit ("CDs"),
issued in amounts of (Yen)10 million (approximately US$96 thousand at the
Federal Reserve Bank of New York's noon buying rate on March 31, 2004) or more
with respect to domestic deposits and issued in amounts of US$100,000 or more
with respect to foreign deposits were (Yen)11,831,911 million and
(Yen)4,494,254 million, respectively, at March 31, 2003, and (Yen)10,714,657
million and (Yen)6,363,946 million, respectively, at March 31, 2004.

The maturity information at March 31, 2004 for domestic and foreign time
deposits, including CDs, is summarized as follows:

<TABLE>
<CAPTION>
                                                Domestic        Foreign
                                             --------------- --------------
                                                     (in millions)
    <S>                                      <C>             <C>
    Due in one year or less................. (Yen)13,579,619 (Yen)8,124,899
    Due after one year through two years....       1,520,254        104,497
    Due after two years through three years.       1,510,701         38,698
    Due after three years through four years         292,612         16,482
    Due after four years through five years.         253,797         11,793
    Due after five years....................          41,221          2,683
                                             --------------- --------------
       Total................................ (Yen)17,198,204 (Yen)8,299,052
                                             =============== ==============
</TABLE>

12. DEBENTURES

In Japan, certain banks, including the Bank, were authorized to issue discount
and coupon debentures in the domestic market under applicable banking laws. The
Bank of Tokyo, Ltd., which merged with The Mitsubishi Bank, Limited to create
the Bank, was authorized to issue such debentures and, after the merger in
1996, the Bank was also permitted to issue discount and coupon debentures in
the domestic market through March 2002 under the Law concerning the Merger and
Conversion of Financial Institutions of Japan.

Debentures at March 31, 2003 and 2004 were comprised of the following:

<TABLE>
<CAPTION>
                                                                                    2003         2004
                                                                                ------------ ------------
                                                                                      (in millions)
<S>                                                                             <C>          <C>
Three-year coupon debentures with interest of 0.02% to 0.06% (0.02% to 0.30% in
  2003)........................................................................ (Yen)260,880 (Yen) 76,427
Five-year coupon debentures with interest of 0.80% to 1.30% (0.80% to 1.70% in
  2003)........................................................................      375,180      189,530
                                                                                ------------ ------------
   Total....................................................................... (Yen)636,060 (Yen)265,957
                                                                                ============ ============
</TABLE>

All debentures of (Yen)265,957 million at March 31, 2004 will mature in the
fiscal year ending March 31, 2005.

                                     F-41

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


13. CALL LOANS AND FUNDS SOLD, AND CALL MONEY AND FUNDS PURCHASED

A summary of funds transactions for the fiscal years ended March 31, 2002, 2003
and 2004 was as follows:

<TABLE>
<CAPTION>
                                                            2002                   2003                   2004
                                                   ---------------------  ---------------------  ---------------------
                                                                              (in millions)
<S>                                                <C>                    <C>                    <C>
Average balance during the fiscal year:
   Call money and funds purchased................. (Yen)       1,872,937  (Yen)       1,770,896  (Yen)       2,029,233
   Call loans and funds sold......................             1,199,028                637,078                557,638
                                                   ---------------------  ---------------------  ---------------------
Net funds purchased position...................... (Yen)         673,909  (Yen)       1,133,818  (Yen)       1,471,595
                                                   ---------------------  ---------------------  ---------------------
Call money and funds purchased:
   Outstanding at end of fiscal year:
       Amount..................................... (Yen)       2,521,520  (Yen)       2,436,308  (Yen)       2,638,298
       Principal range of maturities..............      1 day to 30 days       1 day to 30 days       1 day to 30 days
       Weighted average interest rate.............                  0.37%                  0.23%                  0.17%
   Maximum balance at any month-end during the
     fiscal year.................................. (Yen)       2,522,022  (Yen)       2,569,100  (Yen)       3,833,308
   Weighted average interest rate paid during the
     fiscal year..................................                  0.80%                  0.41%                  0.27%
</TABLE>

Average balances are generally based on a daily average while a month-end
average is used for certain average balances when it is not practicable to
obtain applicable daily averages.

14. SHORT-TERM BORROWINGS AND LONG-TERM DEBT

At March 31, 2003 and 2004, the Group had unused lines of credit amounting to
(Yen)2,441,994 million and (Yen)2,734,328 million, respectively. The amounts
principally consist of the lines of collateralized intraday overdrafts without
interest charges and collateralized overnight loans on bills at the official
discount rate granted by the Bank of Japan, which are used to cover shortages
in the Bank of Japan account and to meet liquidity needs. The Group may borrow
from the Bank of Japan on demand up to the total amount of collateral eligible
for credit extension.

Other short-term borrowings at March 31, 2003 and 2004 were comprised of the
following:

<TABLE>
<CAPTION>
                                                                                 2003            2004
                                                                            --------------  --------------
                                                                                     (in millions)
<S>                                                                         <C>             <C>
Domestic offices:
   Loans on notes and acceptances transferred with recourse (rediscount)... (Yen)  753,970  (Yen)3,376,796
   Commercial paper........................................................         15,000         300,200
   Borrowings from financial institutions..................................        259,909         327,673
   Other...................................................................        221,416         150,609
                                                                            --------------  --------------
       Total domestic offices..............................................      1,250,295       4,155,278
                                                                            --------------  --------------
Foreign offices:
   Commercial paper........................................................        221,209         133,007
   Other...................................................................         71,169          91,463
                                                                            --------------  --------------
       Total foreign offices...............................................        292,378         224,470
                                                                            --------------  --------------
       Total...............................................................      1,542,673       4,379,748
Less unamortized discount..................................................             64             302
                                                                            --------------  --------------
Other short-term borrowings--net........................................... (Yen)1,542,609  (Yen)4,379,446
                                                                            ==============  ==============
Weighted average interest rate on outstanding balance at end of fiscal year           0.76%           0.13%
</TABLE>

                                     F-42

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


A summary of other short-term borrowing transactions for the fiscal years ended
March 31, 2002, 2003 and 2004 was as follows:

<TABLE>
<CAPTION>
                                                             2002            2003            2004
                                                        --------------  --------------  --------------
                                                                         (in millions)
<S>                                                     <C>             <C>             <C>
Average balance outstanding during the fiscal year..... (Yen)1,513,635  (Yen)1,521,078  (Yen)2,745,530
Maximum balance at any month-end during the fiscal year      2,517,923       1,790,728       4,379,446
Weighted average interest rate during the fiscal year..           2.87%           1.74%           0.49%
</TABLE>

Long-term debt (with original maturities of more than one year) at March 31,
2003 and 2004 was comprised of the following:

<TABLE>
<CAPTION>
                                                                                                   2003           2004
                                                                                              -------------- --------------
                                                                                                      (in millions)
<S>                                                                                           <C>            <C>
The Bank:
   Obligations under capital leases.......................................................... (Yen)   22,407 (Yen)   21,194
   Obligation under sale-and-leaseback transactions..........................................        102,208        102,795
   Unsubordinated debt:
      Insurance companies and other institutions, maturing serially through 2035,
        principally 0.25%-7.49%..............................................................        350,427        506,286
      Fixed rate bonds, payable in Japanese yen, due 2004-2022, principally 0.22%-3.00%......      1,730,000      2,002,760
   Subordinated debt:
      Fixed rate notes, payable in United States dollars, due 2010, 8.40%....................        240,250        211,267
      Fixed rate bonds, payable in Japanese yen, due 2006-2013, principally 0.55%-2.39%......        200,000        320,000
      Fixed rate borrowings, payable in Japanese yen, due 2004-2012, principally 1.69%-
        6.20%................................................................................        402,650        386,150
      Adjustable rate bonds, payable in Japanese yen, due 2011-2012, principally 0.56%-
        1.05%................................................................................         33,000         33,000
      Adjustable rate borrowings, payable in Japanese yen, due 2005-2018, principally
        0.69%-3.75%..........................................................................        202,500        176,500
      Adjustable rate borrowings, payable in Yuan, due 2006, principally 2.80%-3.96%.........             --            683
      Floating rate borrowings, payable in Japanese yen, due 2005-2010, principally
        0.06%- 0.42%.........................................................................         12,900          9,000
                                                                                              -------------- --------------
         Total...............................................................................      3,296,342      3,769,635
                                                                                              -------------- --------------
Subsidiaries:
   Unsubordinated debt:
      Insurance companies and other institutions, due 2004-2011, principally 0.32%-11.62%.... (Yen)  229,910 (Yen)  208,366
      0.25% Convertible Bonds due 2014, payable in Japanese yen..............................         51,295         50,700
      Fixed rate bonds and notes, payable in United States dollars, due 2004-2018,
        principally 2.20%-6.53%..............................................................         38,013         36,380
      Fixed rate bonds and notes, payable in Japanese yen, due 2004-2017, principally
        0.17%- 4.40%.........................................................................         98,588        107,045
      Adjustable rate bonds and notes, payable in United States dollars, due 2007-2023,
        principally 6.46%-8.44%..............................................................          8,744          8,135
      Adjustable rate bonds and notes, payable in Japanese yen, due 2007-2021,
        principally 1.34%-4.71%..............................................................         21,645         10,088
      Floating rate bonds and notes, payable in United States dollars, due 2005-2010,
        principally 1.97%-5.10%..............................................................          3,585          3,386
      Floating rate bonds and notes, payable in Japanese yen, due 2004-2023, principally
        0.13%-4.71%..........................................................................         65,865         67,386
      Floating rate notes, payable in Euro, due 2017, 4.59%..................................          1,254             --
      Obligations under capital leases and other miscellaneous debt..........................         40,217         31,002
                                                                                              -------------- --------------
         Total unsubordinated debt...........................................................        559,116        522,488
                                                                                              -------------- --------------
</TABLE>

                                     F-43

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

<TABLE>
<CAPTION>
                                                                                                   2003           2004
                                                                                              -------------- --------------
                                                                                                      (in millions)
<S>                                                                                           <C>            <C>
   Subordinated debt:
      Insurance companies and other institutions, due 2005-2010, principally 3.10%-3.39%.....          4,335          4,605
      Undated notes, payable in Japanese yen, principally 0.40%-4.90%........................         58,000         58,000
      Fixed rate undated notes, payable in Japanese yen, principally 1.40%-2.60%.............          9,791         38,967
      Fixed rate bonds and notes, payable in United States dollars, due 2007-2029,
        principally 5.25%-7.35%..............................................................          6,418         49,222
      Fixed rate bonds and notes, payable in Japanese yen, due 2006-2028, principally
        0.37%- 5.10%.........................................................................         79,707         79,251
      Adjustable rate undated notes, payable in United States dollars, 3.04%.................          4,796             --
      Adjustable rate undated notes, payable in Japanese yen, principally 0.77%-3.16%........        335,809        299,448
      Adjustable rate bonds and notes, payable in United States dollars, due 2009, 2.00%.....          3,556          3,166
      Adjustable rate bonds and notes, payable in Japanese yen, due 2006-2010,
        principally 0.12%-5.93%..............................................................         93,271         79,442
      Floating rate undated notes, payable in Japanese yen, principally 1.27%-1.57%..........         53,697         91,323
      Floating rate bonds and notes, payable in United States dollars, due 2006-2013,
        principally 1.98%-5.12%..............................................................          5,996          6,421
      Floating rate bonds and notes, payable in Japanese yen, due 2004-2027, principally
        0.22%-5.61%..........................................................................         50,318         40,556
      Other miscellaneous debt...............................................................          2,708          5,480
                                                                                              -------------- --------------
         Total subordinated debt.............................................................        708,402        755,881
   Mandatorily redeemable preferred securities of subsidiary grantor trust...................         43,499             --
   Junior subordinated debt payable to subsidiary grantor trust..............................             --         38,989
                                                                                              -------------- --------------
         Total...............................................................................      1,311,017      1,317,358
                                                                                              -------------- --------------
Total........................................................................................ (Yen)4,607,359 (Yen)5,086,993
                                                                                              ============== ==============
</TABLE>
--------
Notes:
1. Adjustable rate debts are debts where interest rates are reset in accordance
   with the terms of the debt agreements, and floating rate debts are debts
   where interest rates are repriced in accordance with movements of market
   indices.
2. 0.25% Convertible Bonds of (Yen)50,700 million, unsubordinated debt of
   subsidiaries, can be convertible into common stock of Mitsubishi Securities.
3. Mandatorily redeemable preferred securities of subsidiary grantor trust and
   Junior subordinated debt payable to subsidiary grantor trust were issued by
   a wholly owned subsidiary of UNBC (see Notes 22 and 24). On February 19,
   2004, they were redeemed by UNBC.

Certain unsubordinated bonds and notes (aggregating (Yen)43,680 million at
March 31, 2004), and certain subordinated bonds and notes (aggregating
(Yen)678,848 million at March 31, 2004) issued by subsidiaries are guaranteed,
on a subordinated basis, by the Bank or a subsidiary as to payment of principal
and interest.

The Bank and certain subsidiaries entered into interest rate and currency swaps
for certain debt in order to manage exposure to interest rate and currency
exchange rate movements. As a result of these swap arrangements, the effective
interest rates may differ from the coupon rates reflected in the above table.
The interest rates for the adjustable and floating rate debt shown in the above
table are those in effect at March 31, 2003 and 2004. Certain interest rates
are determined by formulas and may be subject to certain minimum and maximum
rates. Floating and adjustable rate debt agreements may provide for interest
rate floors to prevent negative interest payments (i.e., receipts).

Certain debt agreements permit the Bank and some of its subsidiaries to redeem
the related debt, in whole or in part, prior to maturity at the option of the
issuer on terms specified in the respective agreements.

                                     F-44

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


The following is a summary of maturities of long-term debt subsequent to March
31, 2004:

<TABLE>
<CAPTION>
                                                   Other
                                   The Bank     subsidiaries      Total
                                -------------- -------------- --------------
                                               (in millions)
   <S>                          <C>            <C>            <C>
   Fiscal year ending March 31:
      2005..................... (Yen)  474,045 (Yen)  138,472 (Yen)  612,517
      2006.....................        567,630        136,923        704,553
      2007.....................        508,059        120,407        628,466
      2008.....................        289,628         49,776        339,404
      2009.....................        369,199        116,977        486,176
      2010 and thereafter......      1,561,074        754,803      2,315,877
                                -------------- -------------- --------------
          Total................ (Yen)3,769,635 (Yen)1,317,358 (Yen)5,086,993
                                ============== ============== ==============
</TABLE>

15. SEVERANCE INDEMNITIES AND PENSION PLANS

The Bank and Domestic Subsidiaries

The Bank and certain domestic subsidiaries have severance indemnities plans
under which their employees in Japan, other than those who are directors, are
entitled, under most circumstances, upon mandatory retirement at normal
retirement age or earlier termination of employment, to lump-sum severance
indemnities. Under the severance indemnities plans, benefit payments in the
form of lump-sum cash payment without allowing a benefit payee an option to
receive annuity payments, upon mandatory retirement at normal retirement age or
earlier termination of employment, are provided. When a benefit is paid in a
single payment to a benefit payee under the plans, the payment represents final
relief of the obligation.

The Bank and certain domestic subsidiaries also have funded contributory
defined benefit pension plans (private plans) which cover substantially all of
their employees in Japan and provide for lifetime annuity payments commencing
at age 65 based on eligible compensation at the time of severance, years of
service and other factors. The Bank and certain domestic subsidiaries have
Employees' Pension Fund plans ("EPF"s), which are defined benefit pension plans
established under the Japanese Welfare Pension Insurance Law ("JWPIL"). These
plans are composed of (a) substitutional portion based on the pay-related part
of the old-age pension benefits prescribed by JWPIL (similar to social security
benefits in the United States) and (b) a corporate portion based on a
contributory defined benefit pension arrangement established at the discretion
of each subsidiary. The Bank and certain domestic subsidiaries with an EPF and
their employees are exempted from contributions to Japanese Pension Insurance
("JPI") that would otherwise be required if they had not elected to fund the
substitutional portion of the benefit through an EPF arrangement. The EPF, in
turn, pays both the corporate and substitutional pension benefits to retired
beneficiaries out of its plan assets. Benefits of the substitutional portion
are based on a standard remuneration schedule as determined by the JWPIL, but
the benefits of the corporate portion are based on a formula determined by each
employer/EPF. Pension benefits and plan assets applicable to the substitutional
portion are included with the corporate portion of the Bank and certain
domestic subsidiaries in the determination of net periodic costs and funded
status.

In June 2001, the JWPIL was amended to permit each employer/EPF to separate the
substitutional portion from its EPF and transfer the obligation and related
assets to the government. The separation process occurs in several phases.

In June 2003, the Bank submitted to the government an application to transfer
the obligation to pay benefits for future employee service related to the
substitutional portion, and the application was approved by the government

                                     F-45

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

in August 2003. Upon that approval, the Bank began making pension insurance
payments to the government and the government assumes the benefit obligations
arising from future employee services. To complete the entire separation
process, in August 2004, the Bank made another application for transfer of the
remaining substitutional portion (benefit obligation related to past services),
but the timing of the approval is not known yet. Upon the approval of the
second application, the Bank will transfer to a government agency some of its
plan assets and, in exchange, be released from paying the remaining
substitutional portion of the benefit obligations for past employee services.
The impact on the consolidated financial statements of the transfers accounted
for in accordance with EITF 03-2 is not known and cannot be reasonably
estimated until the completion of the transfer, as explained in Note 1 to the
consolidated financial statements.

The Bank also has closed Tax-Qualified Pension Plans ("closed TQPPs"), funded
non-contributory defined benefit pension plans, providing benefits to certain
retired employees, excluding directors, in Japan, based on eligible
compensation at the time of severance, years of service and other factors. The
Bank's plan covers retired employees whose service period with the Bank was 5
years or more, and provides for lifetime or certain limited period annuity
payments commencing at age 60.

Net periodic cost of the severance indemnities and pension plans, net of
contributions made by employees, for the fiscal years ended March 31, 2002,
2003 and 2004 included the following components:

<TABLE>
<CAPTION>
                                                                               2002          2003          2004
                                                                           ------------  ------------  ------------
                                                                                         (in millions)
<S>                                                                        <C>           <C>           <C>
Service cost--benefits earned during the fiscal year...................... (Yen) 16,283  (Yen) 18,368  (Yen) 17,962
Interest costs on projected benefit obligation............................       18,764        18,055        14,740
Expected return on plan assets............................................      (19,994)      (21,906)      (13,273)
Amortization of unrecognized net obligation at transition.................        2,103         1,991         1,993
Amortization of unrecognized prior service cost...........................        3,320         2,312          (795)
Amortization of net actuarial loss........................................        8,877        17,729        26,941
Loss on settlements.......................................................        4,816         5,121         4,237
                                                                           ------------  ------------  ------------
Net periodic benefit cost................................................. (Yen) 34,169  (Yen) 41,670  (Yen) 51,805
                                                                           ============  ============  ============
Weighted-average assumptions used:
   Discount rates in determining expense..................................         2.87%         2.50%         1.87%
   Discount rates in determining benefit obligation.......................         2.50          1.87          2.07
   Rates of increase in future compensation level for determining
     expense..............................................................         2.71          2.42          2.33
   Rates of increase in future compensation level for determining benefit
     obligation...........................................................         2.42          2.33          2.56
   Expected rates of return on plan assets................................         4.91          4.14          2.53
</TABLE>

                                     F-46

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


The following table sets forth the combined funded status and amounts
recognized in the accompanying consolidated balance sheets at March 31, 2003
and 2004 for the plans of the Bank and certain domestic subsidiaries. The Bank
and some of its domestic subsidiaries have measured plan assets and benefit
obligations at December 31 each fiscal year for the purpose of financial
statements. Accordingly, funded status and amounts recognized in the table
below shows the combined amounts of those presented in the consolidated
financial statements of these subsidiaries.

<TABLE>
<CAPTION>
                                                                                      2003
                                                                   ------------------------------------------  -------------
                                                                    Severance                                   Severance
                                                                   indemnities                                 indemnities
                                                                    plans and                                   plans and
                                                                       non-                                        non-
                                                                   contributory   Contributory                 contributory
                                                                     pension        pension                      pension
                                                                      plans          plans          Total         plans
                                                                   ------------  -------------  -------------  ------------
                                                                                                        (in millions)
<S>                                                                <C>           <C>            <C>            <C>
Change in benefit obligation:
  Benefit obligation at beginning of fiscal year.................. (Yen)106,810  (Yen) 616,135  (Yen) 722,945  (Yen)140,531
   Service cost...................................................        6,240         12,128         18,368         7,310
   Interest cost..................................................        3,017         15,038         18,055         2,343
   Plan participants' contributions...............................           --          2,364          2,364            --
   Amendments.....................................................       (3,447)       (44,027)       (47,474)           --
   Acquisitions...................................................       28,106             --         28,106            --
   Divestitures...................................................           --             --             --           (37)
   Actuarial loss (gain)..........................................       13,779         69,882         83,661         3,606
   Benefits paid..................................................       (1,493)       (15,511)       (17,004)       (2,953)
   Lump-sum payment...............................................      (12,481)            --        (12,481)      (11,659)
                                                                   ------------  -------------  -------------  ------------
  Benefit obligation at end of fiscal year........................      140,531        656,009        796,540       139,141
                                                                   ------------  -------------  -------------  ------------
Change in plan assets:
  Fair value of plan assets at beginning of fiscal year...........       59,184        443,136        502,320        62,703
   Actual return (negative return) on plan assets.................       (8,735)       (30,758)       (39,493)       11,124
   Acquisitions...................................................       12,248             --         12,248            --
   Divestitures...................................................           --             --             --           (24)
   Employer contributions.........................................        1,499         42,570         44,069         3,922
   Plan participants' contributions...............................           --          2,364          2,364            --
   Benefits paid..................................................       (1,493)       (15,511)       (17,004)       (2,953)
                                                                   ------------  -------------  -------------  ------------
  Fair value of plan assets at end of fiscal year.................       62,703        441,801        504,504        74,772
                                                                   ------------  -------------  -------------  ------------
  Projected benefit obligation in excess of plan assets at end of
   fiscal year....................................................      (77,828)      (214,208)      (292,036)      (64,369)
   Contributions to or benefits paid from plan assets during
    the three months ended March 31, 2003 and 2004................        5,034         10,289         15,323         3,824
   Unrecognized net actuarial loss................................       59,600        325,324        384,924        44,501
   Unrecognized prior service cost................................       (2,244)       (23,222)       (25,466)       (2,138)
   Unrecognized net (asset) obligation at transition..............       (1,082)         4,432          3,350          (381)
                                                                   ------------  -------------  -------------  ------------
    Net amount recognized......................................... (Yen)(16,520) (Yen) 102,615  (Yen)  86,095  (Yen)(18,563)
                                                                   ============  =============  =============  ============
Amounts recognized in the balance sheets:
   Prepaid pension cost........................................... (Yen)    334  (Yen)      --  (Yen)     334  (Yen)    247
   Accrued pension liability......................................      (59,345)      (181,405)      (240,750)      (47,853)
   Intangible assets..............................................        1,179          4,432          5,611           998
   Accumulated other changes in equity from nonowner
    sources.......................................................       41,312        279,588        320,900        28,045
                                                                   ------------  -------------  -------------  ------------
    Net amount recognized......................................... (Yen)(16,520) (Yen) 102,615  (Yen)  86,095  (Yen)(18,563)
                                                                   ============  =============  =============  ============
</TABLE>
<TABLE>
<CAPTION>
                                                                         2004
                                                                   -----------------------------




                                                                    Contributory
                                                                      pension
                                                                       plans          Total
                                                                   -------------  -------------

<S>                                                                <C>            <C>
Change in benefit obligation:
  Benefit obligation at beginning of fiscal year.................. (Yen) 656,009  (Yen) 796,540
   Service cost...................................................        10,652         17,962
   Interest cost..................................................        12,397         14,740
   Plan participants' contributions...............................         1,864          1,864
   Amendments.....................................................            --             --
   Acquisitions...................................................            --             --
   Divestitures...................................................            --            (37)
   Actuarial loss (gain)..........................................       (17,453)       (13,847)
   Benefits paid..................................................       (17,178)       (20,131)
   Lump-sum payment...............................................            --        (11,659)
                                                                   -------------  -------------
  Benefit obligation at end of fiscal year........................       646,291        785,432
                                                                   -------------  -------------
Change in plan assets:
  Fair value of plan assets at beginning of fiscal year...........       441,801        504,504
   Actual return (negative return) on plan assets.................        41,246         52,370
   Acquisitions...................................................            --             --
   Divestitures...................................................            --            (24)
   Employer contributions.........................................        28,766         32,688
   Plan participants' contributions...............................         1,864          1,864
   Benefits paid..................................................       (17,178)       (20,131)
                                                                   -------------  -------------
  Fair value of plan assets at end of fiscal year.................       496,499        571,271
                                                                   -------------  -------------
  Projected benefit obligation in excess of plan assets at end of
   fiscal year....................................................      (149,792)      (214,161)
   Contributions to or benefits paid from plan assets during
    the three months ended March 31, 2003 and 2004................         5,134          8,958
   Unrecognized net actuarial loss................................       256,272        300,773
   Unrecognized prior service cost................................       (22,533)       (24,671)
   Unrecognized net (asset) obligation at transition..............         1,772          1,391
                                                                   -------------  -------------
    Net amount recognized......................................... (Yen)  90,853  (Yen)  72,290
                                                                   =============  =============
Amounts recognized in the balance sheets:
   Prepaid pension cost........................................... (Yen)      --  (Yen)     247
   Accrued pension liability......................................      (124,404)      (172,257)
   Intangible assets..............................................         1,772          2,770
   Accumulated other changes in equity from nonowner
    sources.......................................................       213,485        241,530
                                                                   -------------  -------------
    Net amount recognized......................................... (Yen)  90,853  (Yen)  72,290
                                                                   =============  =============
</TABLE>
--------
Note:The aggregated accumulated benefit obligations of these plans were
     (Yen)760,577 million and (Yen)752,486 million, respectively, as of March
     31, 2003 and 2004. The Bank and certain domestic subsidiaries have no
     plans with assets in excess of accumulated benefit obligations. The
     severance indemnities plans generally employ a multi-variable, non-linear
     formula based upon compensation at the time of severance, rank and years
     of service. Employees with service in excess of one year are qualified to
     receive lump-sum severance indemnities.

                                     F-47

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


Asset allocation

The Bank's contributory pension plan asset allocations at December 31, 2002 and
2003, by asset category were as follows:

<TABLE>
<CAPTION>
                                                             Contributory Pension
                                                             Plan Assets at
                                                              December 31,
                                                             -------------------
                                                              2002       2003
                                                              ------     ------
   <S>                                                       <C>        <C>
                       Asset Category
                       --------------
      EPF assets............................................  89.66%     88.90%
        Fund for corporate portion..........................  89.66      68.98
          Japanese equity securities........................  20.39      18.51
          Japanese debt securities..........................  26.12      27.71
          General account of life insurance companies *.....  26.62      11.12
          Non-Japanese equity securities....................   8.26       5.92
          Non-Japanese debt securities......................   7.04       5.48
          Short-term assets.................................   1.23       0.24
        Fund for substitutional portion.....................     --      19.92
          Japanese short-term monetary assets **............     --       6.06
          General account of life insurance companies *.....     --      13.86
      Assets retained in employee retirement benefit trust..  10.34      11.10
          Japanese equity securities........................  10.34      11.10
                                                              ------     ------
                                                             100.00%    100.00%
                                                              ======     ======
</TABLE>

Japanese equity securities include MTFG and the Group's common stock in the
amounts of (Yen)1,047 million (0.24% of contributory pension plan assets) and
(Yen)1,330 million (0.27% of contributory pension plan assets) at December 31,
2002 and 2003, respectively.

Japanese debt securities include the Group's debt securities in the amounts of
(Yen)274 million (0.06% of contributory pension plan assets) and (Yen)617
million (0.12% of contributory pension plan assets) at December 31, 2002 and
2003, respectively.

The contributory pension plan assets consisted of EPF and an employee
retirement benefit trust. The Bank is in the process of transferring to the
Japanese Government the substitutional portion of EPF liabilities, and the
assets will be delivered to the Employees' Pension Insurance when the transfer
procedure is completed. Therefore, the EPF assets are separated into a fund for
the corporate portion (hereafter called "fund for the corporate portion"), and
a fund for the substitutional portion of EPF (hereafter called "fund for the
substitutional portion").
--------
Notes:
*  "General account of life insurance companies" is a contract with life
   insurance companies that guarantees a return of approximately 0.75% (from
   April 2003 to March 2004), which is mainly invested in assets with low
   market risk such as Japanese debt securities. In terms of pension plan asset
   allocation, the Bank regards the general account in the same category as
   Japanese debt securities, because it is generally believed that there is a
   high degree of correlation between their performances. The Bank carefully
   monitors life insurance companies by credit rating and other assessments.
** Includes bank deposit for benefit payments at December 31, 2003.

                                     F-48

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


The asset allocations of the Bank and certain domestic subsidiaries in
severance indemnities plans and non-contributory pension plans are as follows.

<TABLE>
<CAPTION>
                                         Asset ratio at
                        Asset category    December 31,
                        --------------   --------------
                                          2002    2003
                                         ------  ------
                       <S>               <C>     <C>
                       Equity securities  71.03%  74.23%
                       Debt securities..  21.42   18.26
                       Others...........   7.55    7.51
                                         ------  ------
                          Total......... 100.00% 100.00%
                                         ======  ======
</TABLE>
--------
Note:The Bank's severance indemnities plan assets are an employee retirement
     benefit trust invested in Japanese equity securities.

Investment policies

The Bank's target asset allocation for funds for the corporate portion in
contributory pension plans, which is the EPF funds not including the funds for
the substitutional portion, is as follows:

<TABLE>
<CAPTION>
                                                Asset ratio at
                                                 December 31,
                         Asset category                2003
                         --------------         --------------
                 <S>                            <C>
                 Japanese equity securities....      25.3%
                 Japanese debt securities......      57.1
                 Non-Japanese equity securities      10.2
                 Non-Japanese debt securities..       7.4
                                                    -----
                    Total......................     100.0%
                                                    =====
</TABLE>

The Bank regards that the purpose of contributory pension plan investments is
to achieve assured benefits and stable contributions through proper risk
control and return maximization. The Bank attaches a great deal of importance
to the long-term performance of its contributory pension plan investments to
achieve assured benefits. The Bank fixes the long-term asset allocation, which
will be maintained for approximately five years, for efficient long-term
investment return. The long-term asset allocation is based on optimal
portfolios, which are estimated by expected return and risk according to each
asset class, while considering the Bank's risk tolerance.

The Bank invests the fund for the substitutional portion in assets with high
liquidity and low market risk, because these assets will be delivered to the
Employees' Pension Insurance when the refund procedure is completed. As a
general rule, the Bank reviews its investment policies approximately every five
years. Additionally, a review is made in the following situations: large
fluctuations in pension plan liabilities caused by modifications of pension
plans, or changes in the market environment. The Bank carefully examines
investment in alternative assets, such as derivatives or hedge funds, while
considering the Bank's investment administration structure. The Bank controls
risk on its pension plan portfolio by standard deviation analysis.
Additionally, the Bank requires and checks that investment companies tracks
errors in each asset class within a designated range.

The bank regards that the purpose of employee retirement benefit trust
investment is to achieve assured benefits by contribution of assets to the
trust. Employee retirement benefit trust assets are invested in Japanese equity
securities. This asset allocation will be held for the mid-term, but it is
undecided whether it will be held in the long term.

                                     F-49

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


The Bank's severance indemnities plan consists of an employee retirement
benefit trust. The trust's purpose and basic policy is described above. The
Bank's TQPPs has closed and there are no more new beneficiaries. Therefore, to
achieve assured benefit, the fund is invested in assets with low market risk.

Basis and procedure for estimating long-term return of each asset class

The expected long-term return on the fund for the corporate portion of the
contributory pension plan is 3.7% for each asset class. The expected rate of
return for each asset class is based on long-term prospects for the economy,
historical performance, market environment, and some other factors. The
expected rate of return on the fund for the substitutional portion of the
contributory pension plan is estimated as 0.6% based on historical performance.

The expected rate of return on the employee retirement benefit trust is
estimated as 1.0% based on the expected dividend yield on Japanese equity
securities. Expected capital return is not taken into account, because the
long-term asset allocation is undecided.

The Bank's severance indemnities plan consists of an employee retirement
benefit trust. The trust's expected return is as described above.

Expected rate of return on closed TQPPs is estimated as 2.73% based on the
performance over the last three fiscal years.

Cash flows

The Bank and certain domestic subsidiaries expect to contribute approximately
(Yen)21 billion to pension plans in the fiscal year ending March 31, 2005 based
upon their current funded status and expected asset return assumptions.

In accordance with the provisions of SFAS No. 87, the Group has recorded an
additional minimum liability representing the excess of the accumulated benefit
obligation over the fair value of plan assets and accrued pension liabilities
previously recorded. A corresponding amount is recognized as an intangible
asset to the extent of unrecognized net obligation at transition and prior
service costs, with the remaining balance recorded as a separate reduction of
shareholder's equity, net of income taxes.

In accordance with the Bank's and certain domestic subsidiaries' employment
practices, certain early-terminated employees are entitled to special lump-sum
termination benefits. The amounts charged to operations for such early
termination benefits for the fiscal years ended March 31, 2002, 2003 and 2004
were (Yen)7,818 million, (Yen)11,035 million and (Yen)8,902 million,
respectively.

In accordance with amendments to the relevant welfare pension legislation, the
Bank amended its contributory defined benefit pension plans to change the age
of commencement of lifetime annuity payments from 60 to 65 in January 2002,
which was reflected in the consolidated financial statements for the fiscal
year ended March 31, 2003 because of the Bank's measurement date of December
31, 2001. Furthermore, in November 2002, the Bank amended its pension plan to
reduce employee pension benefits by amounts ranging from 7% to 20%, which will
be payable to employees who retire on or after April 1, 2003. The effect of the
negative amendments was a decrease in (Yen)44,027 million of the projected
benefit obligation. Mitsubishi Securities, one of the Bank's securities
subsidiaries, amended its pension plan to change the lifetime annuity payments
to limited period annuity payments. The amendment resulted in a decrease of
(Yen)3,447 million of the projected benefit obligation.

                                     F-50

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


During the fiscal year ended March 31, 2002, the Bank entered into a retirement
benefit trust agreement with a domestic trust bank and contributed marketable
equity securities at fair value of (Yen)122,231 million to the trusts
designated to pay benefits for the severance indemnities plan and the
contributory pension plan. The contributions were accounted for as sales with
an aggregate gain of (Yen)16,636 million recognized for the fiscal year then
ended. Such contributions were accounted for as sales because the transfer met
the sale accounting criteria of SFAS No. 140, and the securities placed into
the trust were qualified as plan assets as defined by SFAS No. 87.

On April 2, 2001, NTB has become a wholly owned subsidiary of MTFG in
connection with the business combination and has been excluded from the Bank's
consolidation.

Since the merger between Mitsubishi Trust, NTB and TTB on October 1, 2001, the
pension plans of NTB and TTB have been separately administered and managed
without integrating into Mitsubishi Trust's plans, and have continued to
provide the same level of benefits to the eligible employees of NTB and TTB
without any amendment.

Foreign Offices and Subsidiaries

Foreign offices and subsidiaries also have defined contribution plans and/or
defined benefit plans. The cost of such plans charged to operations for the
fiscal years ended March 31, 2002, 2003 and 2004 were (Yen)5,422 million,
(Yen)6,812 million and (Yen)7,728 million, respectively, including (Yen)2,412
million, (Yen)3,255 million and (Yen)3,404 million, respectively, for defined
contribution plans.

Foreign offices and subsidiaries have postemployment and/or postretirement
plans for eligible employees and retirees. The costs charged to operations for
the fiscal years ended March 31, 2002, 2003 and 2004 were (Yen)1,357 million,
(Yen)1,906 million and (Yen)3,115 million, respectively.

Certain of the Bank's subsidiaries in the United States of America maintain
employees' retirement plans, which are qualified retirement plans covering
substantially all of the employees of such subsidiaries. The plans are
non-contributory defined benefit plans, which provide benefit upon retirement
based on years of service and average compensation. The plans are funded on a
current basis in compliance with the requirement of the Employee Retirement
Income Security Act of the United States of America. These subsidiaries also
provide certain post employment benefits and postretirement benefits other than
pensions for employees. Plan assets are generally invested in U.S. government
securities, corporate bonds and mutual funds.

                                     F-51

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


The net periodic cost of the employees' retirement and other benefit plans of
certain offices and subsidiaries in the United States of America for the fiscal
years ended March 31, 2002, 2003 and 2004 include the following components:

<TABLE>
<CAPTION>
                                                                               2002         2003         2004
                                                                           -----------  -----------  -----------
                                                                                       (in millions)
<S>                                                                        <C>          <C>          <C>
Service cost--benefits earned during the fiscal year...................... (Yen) 3,521  (Yen) 4,492  (Yen) 5,060
Interest costs on projected benefit obligation............................       6,317        7,550        7,567
Expected return on plan assets............................................      (7,462)      (9,167)      (9,769)
Amortization of unrecognized net obligation at transition.................         233          455          307
Amortization of unrecognized prior service cost...........................         (30)         (31)         (89)
Amortization of net actuarial loss........................................         378          722        1,866
                                                                           -----------  -----------  -----------
Net periodic benefit cost................................................. (Yen) 2,957  (Yen) 4,021  (Yen) 4,942
                                                                           ===========  ===========  ===========
Weighted-average assumptions used:
   Discount rates in determining expense..................................        7.53%        7.30%        6.79%
   Discount rates in determining benefit obligation.......................        7.30         6.79         6.23
   Rates of increase in future compensation level for determining expense.        5.00         4.89         4.90
   Rates of increase in future compensation level for determining benefit
     obligation...........................................................        4.89         4.90         5.03
   Expected rates of return on plan assets................................        8.30         8.35         8.24
</TABLE>

                                     F-52

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


The following table sets forth the funded status and amounts recognized in the
accompanying consolidated balance sheets at March 31, 2003 and 2004 for the
employees' retirement and other benefit plans of certain offices and
subsidiaries in the United States of America:

<TABLE>
<CAPTION>
                                                                                    2003          2004
                                                                                ------------  ------------
                                                                                       (in millions)
<S>                                                                             <C>           <C>
Change in benefit obligation:
   Benefit obligation at beginning of fiscal year.............................. (Yen)107,916  (Yen)119,451
       Service cost............................................................        4,492         5,060
       Interest cost...........................................................        7,550         7,567
       Plan participants' contributions........................................          202           228
       Amendments..............................................................       (1,071)         (682)
       Actuarial loss..........................................................       15,836         7,774
       Benefits paid...........................................................       (4,678)       (4,983)
       Translation adjustments.................................................      (10,796)      (13,963)
                                                                                ------------  ------------
   Benefit obligation at end of fiscal year....................................      119,451       120,452
                                                                                ------------  ------------
Change in plan assets:
   Fair value of plan assets at beginning of fiscal year.......................       94,787        96,448
       Actual return (negative return) on plan assets..........................       (9,015)       21,741
       Employer contribution...................................................       24,154        14,755
       Plan participants' contributions........................................          202           228
       Benefits paid...........................................................       (4,577)       (4,925)
       Translation adjustments.................................................       (9,103)      (12,764)
                                                                                ------------  ------------
   Fair value of plan assets at end of fiscal year.............................       96,448       115,483
                                                                                ------------  ------------
   Projected benefit obligation in excess of plan assets at end of fiscal year.      (23,003)       (4,969)
       Unrecognized net actuarial loss.........................................       47,866        36,826
       Unrecognized prior service cost.........................................          156          (412)
       Unrecognized net obligation at transition...............................        3,343         2,599
                                                                                ------------  ------------
          Net amount recognized................................................ (Yen) 28,362  (Yen) 34,044
                                                                                ============  ============
Amounts recognized in the balance sheets:
       Prepaid pension cost.................................................... (Yen) 30,645  (Yen) 37,147
       Accrued pension liability...............................................       (3,375)       (3,559)
       Intangible assets.......................................................           15             6
       Accumulated other changes in equity from nonowner sources...............        1,077           450
                                                                                ------------  ------------
          Net amount recognized................................................ (Yen) 28,362  (Yen) 34,044
                                                                                ============  ============
</TABLE>

                                     F-53

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


16. OTHER ASSETS AND LIABILITIES

Major components of other assets and liabilities at March 31, 2003 and 2004
were as follows:

<TABLE>
<CAPTION>
                                                                                        2003           2004
                                                                                   -------------- --------------
                                                                                           (in millions)
<S>                                                                                <C>            <C>
Other assets:
   Accounts receivable:
       Receivables from brokers, dealers and customers for securities
         transactions............................................................. (Yen)  435,378 (Yen)  260,701
       Other......................................................................        218,121        236,649
   Investments in affiliated companies............................................         26,508         47,099
   Other real estate owned, net...................................................          7,337          3,577
   Non-interest-earning deposits with the Special Fund and the New Fund
     (See Note 5).................................................................         79,528         82,104
   Other..........................................................................        754,082      1,061,752
                                                                                   -------------- --------------
          Total................................................................... (Yen)1,520,954 (Yen)1,691,882
                                                                                   ============== ==============
Other liabilities:
   Accounts payable:
       Payables to brokers, dealers and customers for securities transactions..... (Yen)  698,448 (Yen)  665,900
       Other......................................................................        454,093        423,254
   Deferred tax liabilities.......................................................         61,578         58,431
   Allowance for off-balance-sheet credit instruments.............................         68,854         97,039
   Accrued pension liability......................................................        249,661        186,331
   Minority interest..............................................................        347,987        372,346
   Accrued and other liabilities..................................................        514,643        576,662
   Guarantees and indemnifications................................................         16,133         20,005
                                                                                   -------------- --------------
          Total................................................................... (Yen)2,411,397 (Yen)2,399,968
                                                                                   ============== ==============
</TABLE>

At March 31, 2003 and 2004, the valuation allowance to write down the carrying
amounts of other real estate owned to their estimated fair value less estimated
cost to sell was (Yen)4,923 million and (Yen)499 million, respectively. The
valuation allowance decreased by (Yen)24,158 million, (Yen)5,122 million and
(Yen)4,424 million, respectively, during the fiscal years ended March 31, 2002,
2003 and 2004.

Investments in affiliated companies, which are accounted for using the equity
method, include marketable equity securities carried at (Yen)6,697 million and
(Yen)7,341 million, respectively, at March 31, 2003 and 2004. Corresponding
aggregated market values were (Yen)11,834 million and (Yen)27,987 million,
respectively.

17. PREFERRED STOCK

By the Articles of Incorporation, the Bank is authorized to issue 100,000,000
shares of Preferred Stock without par value.

Preferred Stock is non-voting and have equal preference with Bank's common
stock for the payment of dividends and the distribution of assets in the event
of a liquidation or dissolution of the Bank. This is non-cumulative and
non-participating with respect to dividend payments. Shareholder of Preferred
Stock receives a liquidation distribution at (Yen)3,000 per share, and does not
have the right to participate in any further liquidation distributions.

Preferred Stock is redeemable at the option of the Bank. At the time of
issuance, the Board of Directors determines an issue price, an annual dividend
(not to exceed (Yen)360 per share) and redemption terms, including a redemption
price.

                                     F-54

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


"Class 1 Preferred Stock" was changed its name to "Preferred Stock" by
modification of the Articles of Incorporation under resolution of shareholders
meeting on June 26, 2002.

18. COMMON STOCK AND CAPITAL SURPLUS

The changes in the number of issued shares of common stock during the fiscal
years ended March 31, 2002, 2003 and 2004 were as follows:

<TABLE>
<CAPTION>
                                               2002      2003      2004
                                             --------- --------- ---------
                                               (in thousands of shares)
      <S>                                    <C>       <C>       <C>
      Balance at beginning of fiscal year... 4,675,456 4,675,456 5,019,470
      Issuance of new shares of common stock        --   344,014        --
                                             --------- --------- ---------
      Balance at end of fiscal year......... 4,675,456 5,019,470 5,019,470
                                             ========= ========= =========
</TABLE>

Under the Code, issuances of common stock, including conversions of bonds and
notes, are required to be credited to the common stock account for at least 50%
of the proceeds and to the legal capital surplus account ("legal capital
surplus") for the remaining amounts.

The Code permits Japanese companies, upon approval by the Board of Directors,
to issue shares in the form of a "stock split," as defined in the Code (see
Note 1). Also, the Code prior to April 1, 1991 permitted Japanese companies to
issue free share distributions. The Bank from time to time made free share
distributions. These free distributions usually were from 5% to 10% of
outstanding common stock and publicly-owned corporations in the United States
issuing shares in similar transactions would be required to account for them as
stock dividends as of the shareholders' record date by reducing retained
earnings and increasing the appropriate capital accounts by an amount equal to
the fair value of the shares issued. The application of such United States
accounting practice to the cumulative free distributions made by the Bank at
March 31, 2004, would have increased capital accounts by (Yen)1,748,080 million
with a corresponding decrease in unappropriated retained earnings.

The Code permits, upon approval of the Board of Directors, the transfer of
amounts from the legal capital surplus to the capital stock account.

The Code, as amended effective on October 1, 2001 (the "Code Amendments")
permits Japanese companies to effect purchases of their own shares pursuant to
a resolution by the shareholders at an annual general meeting until the
conclusion of the following ordinary general meeting of shareholders, and to
hold such shares as its treasury shares indefinitely regardless of purpose.
However, the Code requires the amount of treasury stock purchased be within the
amount of retained earnings available for dividends. Disposition of treasury
stock is subject to the approval of the Board of Directors and is to follow the
procedures similar to a public offering of shares for subscription. Prior to
the amendment, in principle, reacquisition of treasury shares was prohibited
with the exception of reacquisition for retirement and certain limited
purposes, as specified by the Code. Any treasury shares were required to be
disposed of in the near term.

Parent Company Shares Held by the Group

At March 31, 2004, the Group owned shares of common stock of MTFG. Such shares
are included in parent company's stock in the accompanying consolidated balance
sheets and deducted from shareholder's equity. For the fiscal year ended March
31, 2003, the MTFG shares held by the Bank were written down for tax purposes.
The tax consequence of such write-down was treated as a capital transaction and
credited to capital surplus.

                                     F-55

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


19. RETAINED EARNINGS, LEGAL RESERVE AND DIVIDENDS

In addition to the Code, Japanese banks, including the Bank, are required to
comply with the Banking Law of Japan (the "Banking Law").

Legal Reserve Set Aside as Appropriation of Retained Earnings and Legal Capital
Surplus

Under the Code

Effective October 1, 2001, the Code Amendments provide that an amount at least
equal to 10% of the aggregate amount of cash dividends and certain
appropriations of retained earnings associated with cash outlays applicable to
each period shall be appropriated and set aside as a legal reserve until the
aggregate amount of legal reserve set aside as appropriation of retained
earnings and the legal capital surplus equals 25% of stated capital as defined
in the Code.

Prior to the Code Amendments, the Code provided that an amount at least equal
to 10% of the aggregate amount of cash dividends and certain appropriations of
retained earnings associated with cash outlays applicable to each period shall
be appropriated and set aside as a legal reserve until such reserve equals 25%
of common stock. The retained earnings so appropriated may be used to eliminate
or reduce a deficit by resolution of the shareholders or may be transferred to
capital stock by resolution of the Board of Directors.

Under the Banking Law

In line with the Code Amendments, on June 29, 2001, amendments to the Banking
Law (the "Banking Law Amendments") were promulgated and became effective on
October 1, 2001. The Banking Law Amendments provide that an amount at least
equal to 20% of the aggregate amount of cash dividends and certain
appropriations of retained earnings associated with cash outlays applicable to
each fiscal period shall be appropriated and set aside as a legal reserve until
the aggregate amount of legal reserve set aside as appropriation of retained
earnings and the legal capital surplus equals 100% of stated capital as defined
in the Code.

Prior to the Banking Law Amendments, the Banking Law provided that an amount at
least equal to 20% of the aggregate amount of cash dividends and certain
appropriations of retained earnings associated with cash outlays applicable to
each fiscal period shall be appropriated and set aside as a legal reserve until
such reserve equals 100% of stated capital as defined in the Code. The retained
earnings so appropriated may be used to eliminate or reduce a deficit by
resolution of the shareholders or may be transferred to capital stock by
resolution of the Board of Directors.

Transfer of Legal Reserve

Under the Code Amendments

Effective October 1, 2001, under the Code Amendments, Japanese companies,
including the Bank, are permitted, pursuant to a resolution by the shareholders
at a general meeting, to make legal reserve set aside as appropriation of
retained earnings and legal capital surplus available for dividends until the
aggregate amount of the legal reserve and legal capital surplus equals 25% of
stated capital as defined in the Code, which were formerly permitted only to
reduce deficit and to transfer to stated capital as defined in the Code.

Under the Banking Law Amendments

Effective October 1, 2001, under the Banking Law Amendments, Japanese banks,
including the Bank, are permitted, pursuant to a resolution by the shareholders
at a general meeting, to make legal reserve set aside as

                                     F-56

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

appropriation of retained earnings and legal capital surplus available for
dividends until the aggregate amount of the legal reserve and legal capital
surplus equals 100% of stated capital as defined in the Code.

The Code permits the transfer, upon approval of the shareholders, of a portion
of unappropriated retained earnings available for dividends to stated capital
as defined in the Code.

Unappropriated Retained Earnings and Dividends

Under the Code, the amount available for dividends is based on the amount
recorded in the Bank's general books of account maintained in accordance with
accounting principles generally accepted in Japan ("Japanese GAAP"). The
adjustments included in the accompanying consolidated financial statements but
not recorded in the Bank's general books of account as explained in Note 1 have
no effect on the determination of retained earnings available for dividends
under the Code. In addition to the provision that requires an appropriation for
legal reserve as described above, the Code and the Banking Law impose certain
limitations on the amount available for dividends. Under the Banking Law, the
Bank has to meet the minimum capital adequacy requirements and distributions of
retained earnings of the Bank, which are otherwise distributable to
shareholders, are restricted in order to maintain the minimum 4.0% Tier I
capital for capital adequacy purpose.

None of the retained earnings recorded in the Bank's general books of account,
prepared in accordance with Japanese GAAP, as of March 31, 2004 ((Yen)768,093
million, exclusive of the amounts to be appropriated for legal reserves and
gross unrealized gains on fair valuation of assets, as defined, if any), is
restricted by such limitations under the Code or by the Banking Law as
described above.

Annual dividends, including those for preferred stock, are approved by the
shareholders at an annual general meeting held subsequent to the fiscal year to
which the dividends are applicable. In addition, a semi-annual interim dividend
payment may be made by resolution of the Board of Directors, subject to
limitations imposed by the Code and the Banking Law.

In the accompanying consolidated statements of shareholder's equity, dividends
and appropriations to legal reserve shown for each year represent dividends
approved and paid during the year and the related appropriation to legal
reserve.

20. REGULATORY CAPITAL REQUIREMENTS

Japan

The Bank is subject to various regulatory capital requirements promulgated by
the regulatory authorities of the countries in which it operates. Failure to
meet minimum capital requirements will initiate certain mandatory actions by
regulators that, if undertaken, could have a direct material effect on the
Bank's consolidated financial statements.

In Japan, the Bank is subject to regulatory capital requirements administered
by the FSA in accordance with the provisions of the Banking Law and related
regulations. A banking institution is subject to the minimum capital adequacy
requirements both on a consolidated basis and a stand-alone basis, and is
required to maintain the minimum capital irrespective of whether it operates
independently or as a subsidiary under the control of another company. When a
bank holding company manages operations of its banking subsidiaries, it is
required to maintain the minimum capital adequacy ratio on a consolidated basis
in the same manner as its subsidiary banks. The FSA provides two sets of
capital adequacy guidelines. One is a set of guidelines applicable to Japanese
banks and bank holding companies with foreign offices conducting international
operations, as defined, and the other is applicable to Japanese banks and bank
holding companies that are not engaged in international operations.

                                     F-57

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


Under the capital adequacy guidelines applicable to a Japanese banking
institution with international operations conducted by foreign offices, the
minimum target capital ratio of 8.0% is required. The capital adequacy
guidelines adopt the approach of risk-weighted capital measure based on the
framework developed and proposed by the Basel Committee on Banking Supervision
of the Bank for International Settlements and involve quantitative credit
measures of the assets and certain off-balance-sheet items as calculated under
accounting principles generally accepted in Japan. Also, a banking institution
engaged in certain qualified trading activities, as defined, is required to
calculate an additional capital charge for market risk using either the
institution's own internal risk measurement model or a standardized process
proposed and defined by the Bank for International Settlements. Capital is
classified into three tiers, referred to as Tier I, Tier II and Tier III. Tier
I generally consists of shareholders' equity (including common stock, preferred
stock, capital surplus, minority interests and retained earnings) less any
recorded goodwill. Tier II generally consists of general reserves for credit
losses up to 1.25% of risk-weighted assets, 45% of the unrealized gains on
investment securities available for sale, 45% of the land revaluation excess,
the balance of perpetual subordinated debt and the balance of subordinated term
debt with an original maturity of over five years subject to some limitations,
up to 50% of Tier I capital. Preferred stocks are includable in Tier I capital
unless the preferred stocks have a fixed maturity, in which case, such
preferred stocks will be components of Tier II capital. Tier III capital
generally consists of short-term subordinated debt with an original maturity of
at least two years, subject to certain limitations. At least 50% of the minimum
capital requirements must be maintained in the form of Tier I capital.

If a banking institution is not engaged in international operations conducted
by foreign offices, it is subject to the other set of capital adequacy
requirements with a minimum target capital ratio of 4.0%. Such guidelines
incorporate measures of risk under the risk-weighted approach similar to the
guidelines applicable to banking institutions with international operations.
Qualifying capital is classified into Tier I and Tier II capital.

The Banking Law and related regulations require that one of three categories be
assigned to banks and bank holding companies, based on its risk-adjusted
capital adequacy ratio if the bank fails to meet the minimum target capital
adequacy ratio. These categories indicate capital deterioration, which may be
subject to certain prompt corrective action by the FSA.

The Bank has international operations conducted by foreign offices, as defined,
and is subject to the 8.0% capital adequacy requirement. For the purpose of
calculating the additional charge for market risk, the Bank has adopted the
internal risk measurement model approach for general market risk calculations.

                                     F-58

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


The risk-adjusted capital amounts and ratios of the Bank presented in the
following table are based on amounts calculated in accordance with accounting
principles generally accepted in Japan as required by the FSA.

<TABLE>
<CAPTION>
                                                                            For capital adequacy
                                                             Actual            purposes
                                                      --------------------  -------------------
                                                          Amount     Ratio   Amount      Ratio
                                                      -------------- -----   ---------   -----
                                                        (in millions except percentages)
<S>                                                   <C>            <C>    <C>          <C>
Consolidated:
   At March 31, 2003:
       Total capital (to risk-weighted assets):...... (Yen)4,687,703 10.43% 3,592,242    8.00%
       Tier I capital (to risk-weighted assets):.....      2,400,251  5.34  1,796,121    4.00
   At March 31, 2004:
       Total capital (to risk-weighted assets):...... (Yen)5,279,586 11.97% 3,527,511    8.00%
       Tier I capital (to risk-weighted assets):.....      2,876,007  6.52  1,763,756    4.00
Stand-alone:
   At March 31, 2003:
       Total capital (to risk-weighted assets):...... (Yen)3,979,265 10.24% 3,107,780    8.00%
       Tier I capital (to risk-weighted assets):.....      1,991,981  5.12  1,553,890    4.00
   At March 31, 2004:
       Total capital (to risk-weighted assets):...... (Yen)4,677,718 12.18% 3,070,027    8.00%
       Tier I capital (to risk-weighted assets):.....      2,437,541  6.35  1,535,014    4.00
</TABLE>

The Bank has securities subsidiaries in Japan and overseas, which are also
subject to regulatory capital requirements. In Japan, the Securities and
Exchange Law and related ordinance require securities firms to maintain a
minimum capital ratio of 120% calculated as a percentage of capital accounts
less certain fixed assets, as determined in accordance with Japanese GAAP,
against amounts equivalent to market, counterparty credit and operations risks.
Specific guidelines are issued as a ministerial ordinance which details the
definition of essential components of the capital ratios, including capital,
deductible fixed asset items and risks, and related measures. Failure to
maintain a minimum capital ratio will trigger mandatory regulatory actions. A
capital ratio of less than 140% will call for regulatory reporting and a
capital ratio of 100% or less may lead to a suspension of all or part of the
business for a period of time and cancellation of a license. Overseas
securities subsidiaries are subject to the relevant regulatory capital
requirements of the countries or jurisdictions in which they operate.

Management believes, as of March 31, 2004, that the Bank and other regulated
securities subsidiaries meet all capital adequacy requirements to which they
are subject.

United States of America

In the United States of America, UnionBanCal Corporation ("UNBC") and its
banking subsidiary Union Bank of California, N.A. ("UBOC"), the Bank's largest
subsidiaries operating outside Japan, are subject to various regulatory capital
requirements administered by U.S. Federal banking agencies, including minimum
capital requirements. Under the capital adequacy guidelines and the regulatory
framework for prompt corrective action, UNBC and UBOC must meet specific
capital guidelines that involve quantitative measures of UNBC's and UBOC's
assets, liabilities, and certain off-balance-sheet items as calculated under
U.S. regulatory accounting practices. UNBC's and UBOC's capital amounts and
UBOC's prompt corrective action classification are also subject to qualitative
judgments by the regulators about components, risk weightings and other factors.

                                     F-59

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


Quantitative measures established by regulation to ensure capital adequacy
require UNBC and UBOC to maintain minimum amounts and ratios (set forth in the
table below) of total and Tier I capital (as defined in the regulations) to
risk-weighted assets (as defined) and of Tier I capital (as defined) to
quarterly average assets (as defined).

UNBC's and the UBOC's actual capital amounts and ratios are presented as
follows:

<TABLE>
<CAPTION>
                                                                         For capital
                                                            Actual       adequacy purposes
                                                         ------------    ----------------
                                                         Amount   Ratio  Amount    Ratio
                                                         ------   -----  ------    -----
                                                         (in millions, except percentages)
<S>                                                      <C>      <C>    <C>       <C>
UNBC:
   At December 31, 2002:
       Total capital (to risk-weighted assets).......... $4,241   12.93% $2,625    8.00%
       Tier I capital (to risk-weighted assets).........  3,667   11.18   1,312    4.00
       Tier I capital (to quarterly average assets).....  3,667    9.75   1,504    4.00
   At December 31, 2003:
       Total capital (to risk-weighted assets).......... $4,684   14.14% $2,651    8.00%
       Tier I capital (to risk-weighted assets).........  3,748   11.31   1,325    4.00
       Tier I capital (to quarterly average assets).....  3,748    9.03   1,660    4.00
</TABLE>

<TABLE>
<CAPTION>
                                                                                      Ratios OCC
                                                                   For capital       requires to be
                                                        Actual     adequacy purposes "well capitalized"
                                                     ------------  ----------------  -----------------
                                                     Amount Ratio  Amount    Ratio   Amount    Ratio
                                                     ------ -----  ------    -----   ------    -----
                                                        (in millions, except percentages)
<S>                                                  <C>    <C>    <C>       <C>     <C>       <C>
UBOC:
   At December 31, 2002:
       Total capital (to risk-weighted assets)...... $3,819 11.87% $2,573    8.00%   $3,216    10.00%
       Tier I capital (to risk-weighted assets).....  3,335 10.37   1,286    4.00     1,930     6.00
       Tier I capital (to quarterly average
         assets)....................................  3,335  9.01   1,481    4.00     1,851     5.00
   At December 31, 2003:
       Total capital (to risk-weighted assets)...... $3,863 11.88% $2,602    8.00%   $3,253    10.00%
       Tier I capital (to risk-weighted assets).....  3,396 10.44   1,301    4.00     1,952     6.00
       Tier I capital (to quarterly average
         assets)....................................  3,396  8.30   1,637    4.00     2,046     5.00
</TABLE>

Management believes, as of December 31, 2003, that UNBC and UBOC met all
capital adequacy requirements to which they are subject.

As of December 31, 2002 and 2003, the most recent notification from the U.S.
Office of the Comptroller of the Currency ("OCC") categorized UBOC as "well
capitalized" under the regulatory framework for prompt corrective action. To be
categorized as "well capitalized," UBOC must maintain minimum total risk-based,
Tier I risk-based, and Tier I leverage ratios as set forth in the table. There
are no conditions or events since that notification that management believes
have changed UBOC's category.

                                     F-60

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


21. EARNINGS (LOSS) PER COMMON SHARE

Reconciliations of net income (loss) and weighted average number of common
shares outstanding used for the computation of basic earnings (loss) per common
share to the adjusted amounts for the computation of diluted earnings (loss)
per common share for the fiscal years ended March 31, 2002, 2003 and 2004 were
as follows:

<TABLE>
<CAPTION>
                                                                            2002            2003            2004
                                                                       --------------  --------------  --------------
                                                                                        (in millions)
<S>                                                                    <C>             <C>             <C>
Income (Numerator):
Income (loss) from continuing operations before cumulative effect of a
  change in accounting principle...................................... (Yen) (139,773) (Yen)  239,140  (Yen)  538,186
Income (loss) from discontinued operations............................          1,235          10,370            (585)
Cumulative effect of a change in accounting principle.................          5,867            (532)             --
                                                                       --------------  --------------  --------------
Net income (loss).....................................................       (132,671)        248,978         537,601
Income allocable to a preferred shareholder...........................         (6,716)         (3,358)        (10,073)
                                                                       --------------  --------------  --------------
Income (loss) available to a common shareholder.......................       (139,387)        245,620         527,528
                                                                       --------------  --------------  --------------
Effect of dilutive securities:
3% Exchangeable Guaranteed Notes redeemed on November 30,
  2002................................................................             --         (10,997)             --
Convertible debt--Mitsubishi Securities...............................             --              --            (877)
Stock option--Mitsubishi Securities...................................             --              --              (7)
Stock option--UnionBanCal Corporation.................................             --              --            (554)
                                                                       --------------  --------------  --------------
Income (loss) available to a common shareholder and assumed
  conversions......................................................... (Yen) (139,387) (Yen)  234,623  (Yen)  526,090
                                                                       ==============  ==============  ==============

                                                                            2002            2003            2004
                                                                       --------------  --------------  --------------
                                                                                    (thousands of shares)
Shares (Denominator):
Weighted average common shares outstanding............................      4,675,454       4,679,226       5,019,470
Effect of dilutive securities :
3% Exchangeable Guaranteed Notes redeemed on November 30,
  2002................................................................             --          98,133              --
                                                                       --------------  --------------  --------------
Weighted average common shares for diluted computation................      4,675,454       4,777,359       5,019,470
                                                                       ==============  ==============  ==============
</TABLE>

                                     F-61

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

<TABLE>
<CAPTION>
                                                                                    2002        2003         2004
                                                                                -----------  ----------  -----------
                                                                                              (in yen)
<S>                                                                             <C>          <C>         <C>
Amounts per share:
Basic earnings (loss) per common share:
   Income (loss) from continuing operations available to a common shareholder
     before cumulative effect of a change in accounting principle.............. (Yen)(31.33) (Yen)50.39  (Yen)105.22
   Income (loss) from discontinued operations..................................        0.26        2.22        (0.12)
                                                                                -----------  ----------  -----------
   Income (loss) available to a common shareholder before cumulative effect of
     a change in accounting principle..........................................      (31.07)      52.61       105.10
   Cumulative effect of a change in accounting principle.......................        1.25       (0.12)          --
                                                                                -----------  ----------  -----------
   Net income (loss) available to a common shareholder......................... (Yen)(29.82) (Yen)52.49  (Yen)105.10
                                                                                ===========  ==========  ===========
Diluted earnings (loss) per common share:
   Income (loss) from continuing operations available to a common shareholder
     before cumulative effect of a change in accounting principle.............. (Yen)(31.33) (Yen)47.05  (Yen)104.93
   Income (loss) from discontinued operations..................................        0.26        2.17        (0.12)
                                                                                -----------  ----------  -----------
   Income (loss) available to a common shareholder before cumulative effect of
     a change in accounting principle..........................................      (31.07)      49.22       104.81
   Cumulative effect of a change in accounting principle.......................        1.25       (0.11)          --
                                                                                -----------  ----------  -----------
   Net income (loss) available to a common shareholder......................... (Yen)(29.82) (Yen)49.11  (Yen)104.81
                                                                                ===========  ==========  ===========
</TABLE>

For the fiscal year ended March 31, 2002, 3% Exchangeable Guaranteed Notes due
2002 could have potentially diluted earnings per common share but were not
included in the computation of diluted earnings per common share due to their
antidilutive effects. For the fiscal year ended March 31, 2003, 3% Exchangeable
Guaranteed Notes due 2002 that had been redeemed in November 2002 were included
in the computation of diluted earnings per common share. For the fiscal year
ended March 31, 2004, convertible securities and stock options issued by the
subsidiaries that could potentially dilute earnings per common share in the
future were included in the computation of earnings per common share. The
convertible securities are 1 1/4% Convertible Bonds due 2013 and  1/4%
Convertible Bonds due 2014 issued by Mitsubishi Securities. The stock options
are based on the stock-based compensation plans of Mitsubishi Securities and
UNBC.

22. DERIVATIVE FINANCIAL INSTRUMENTS

The Group uses various derivative financial instruments both for trading
purposes and for purposes other than trading (primarily risk management
purposes) in the normal course of business to meet the financial needs of its
customers, as a source of revenue and to manage its exposures to a variety of
risks. The Group is a party to derivatives, including swaps, forwards, options
and other types of derivatives, dealing primarily with market risk associated
with interest rate, foreign currency, equity and commodity prices, and credit
risk associated with counterparty's nonperformance of transactions.

Market risk is the possibility that future changes in market indices make the
financial instruments less valuable. Credit risk is the possibility that a loss
may result from a counterparty's failure to perform according to the terms and
conditions of the contract, which may exceed the value of underlying
collateral. To reduce credit risk, the Group may require collateral or
guaranties based on a case-by-case assessment of creditworthiness of each
customer and evaluation of the instrument. The Group also uses master netting
agreements in order to mitigate overall counterparty credit risk.

                                     F-62

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


Trading Activities

The Group's trading activities include dealing and other activities measured at
fair value with gains and losses recognized currently in earnings. As part of
its trading activities, the Group offers a variety of derivative financial
instruments and debt instruments for managing interest rate and foreign
exchange risk to its domestic and foreign corporate and financial institution
customers. The Group also enters into other types of derivative transactions,
including equity and credit-related contracts, for its own account.

Risk Management Activities

As part of risk management activities, the Group uses certain derivative
financial instruments to manage its interest rate and currency exposures. The
Group maintains an overall interest rate risk management strategy that
incorporates the use of interest rate contracts to minimize significant
unplanned fluctuations in earnings that are caused by interest rate volatility.
The Group's goal is to manage interest rate sensitivity so that movements in
interest rates do not adversely affect net interest income. As a result of
interest rate fluctuations, hedged fixed-rate assets and liabilities appreciate
or depreciate in market value. Gains or losses on the derivative instruments
that are linked to the hedged fixed-rate assets and liabilities are expected to
substantially offset this unrealized appreciation or depreciation. Interest
income and interest expense on hedged variable-rate assets and liabilities,
respectively, increase or decrease as a result of interest rate fluctuations.
Gains and losses on the derivative instruments that are linked to these hedged
assets and liabilities are expected to substantially offset this variability in
earnings.

The Group enters into interest rate swaps and other contracts as part of its
interest rate risk management strategy primarily to alter the interest rate
sensitivity of its loans, investment securities and deposit liabilities. The
Group's principal objectives in risk management include asset and liability
management. Asset and liability management is viewed as one of the methods for
the Group to manage its interest rate exposures on interest-bearing assets and
liabilities. Interest rate contracts, which are generally non-leveraged generic
interest rate and basis swaps, options and futures, allow the Group to
effectively manage its interest rate risk position. Option contracts primarily
consist of caps, floors, swaptions and options on index futures. Futures
contracts used for asset and liability management activities are primarily
index futures providing for cash payments based upon the movement of an
underlying rate index. The Group enters into forward exchange contracts,
currency swaps and other contracts in response to currency exposures resulting
from on-balance-sheet assets and liabilities denominated in foreign currencies
in order to limit the net foreign exchange position by currency to an
appropriate level.

The risk management activities reduce the Group's risk exposures economically,
however, derivatives used for the risk management activities often fail to meet
certain conditions to qualify for hedge accounting and the Group accounts for
such derivatives as trading positions.

For the fiscal years ended March 31, 2003 and 2004, except for derivative
transactions conducted by certain foreign subsidiaries, the Group accounts for
derivatives held for risk management purposes as trading positions and measured
them at fair value.

Embedded Derivatives

Derivative features embedded in other non-derivative host contracts are
separated from the host contracts and measured at fair value when they are not
clearly and closely related to the host contract and meet the definition of a
derivative. The change in the fair value of such an embedded derivative is
recognized currently in earnings, unless it is qualified as a hedge. The
carrying amount is reported on the consolidated balance sheet with the host
contract. The Group accounts for credit-linked notes as host contracts with
embedded derivatives and measures the entire contracts at fair value.

                                     F-63

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


UnionBanCal Corporation ("UNBC")

Derivative positions are integral components of the UNBC's designated asset and
liability management activities. UNBC uses interest rate derivatives to manage
the sensitivity of the UNBC's net interest income to changes in interest rates.
These instruments are used to manage interest rate risk relating to specified
groups of assets and liabilities, primarily LIBOR-based commercial loans,
certificates of deposit, trust notes, medium-term notes and subordinated debt.

Cash Flow Hedges--Hedging Strategies for Variable Rate Loans and Certificates
of Deposit

UNBC engages in several types of cash flow hedging strategies for which the
hedged transactions are forecasted future loan interest payments, and the
hedged risk is the variability in those payments due to changes in the
designated benchmark rate, e.g., US dollar LIBOR. In these strategies, the
hedging instruments are matched with groups of variable rate loans such that
the tenor of the variable rate loans and that of the hedging instrument is
identical. Cash flow hedging strategies include the utilization of purchased
floor, cap, corridor options and interest rate swaps. At December 31, 2003, the
weighted average life of these cash flow hedges is approximately 1.5 years.

UNBC uses purchased interest rate floors to hedge the variable cash flows
associated with 1-month LIBOR or 3-month LIBOR indexed loans. Payments received
under the floor contract offset the decline in loan interest income caused by
the relevant LIBOR index falling below the floor's strike rate.

UNBC uses interest rate floor corridors to hedge the variable cash flows
associated with 1-month LIBOR or 3-month LIBOR indexed loans. Net payments to
be received under the floor corridor contracts offset the decline in loan
interest income caused by the relevant LIBOR index falling below the corridor's
upper strike rate, but only to the extent the index falls to the lower strike
rate. The corridor will not provide protection from declines in the relevant
LIBOR index to the extent it falls below the corridor's lower strike rate.

UNBC uses interest rate collars to hedge the variable cash flows associated
with 1-month LIBOR or 3-month LIBOR indexed loans. Net payments to be received
under the collar contracts offset the decline in loan interest income caused by
the relevant LIBOR index falling below the collar's strike rate while net
payments to be paid will reduce the increase in loan interest income caused by
the LIBOR index rising above the collar's cap strike rate.

UNBC uses interest rate swaps to hedge the variable cash flows associated with
1-month LIBOR or 3-month LIBOR indexed loans. Payments to be received (or paid)
under the swap contracts will offset the fluctuations in loan interest income
caused by changes in the relevant LIBOR index. As such, these instruments hedge
all fluctuations in the loans' interest income caused by changes in the
relevant LIBOR index.

UNBC uses purchased interest rate caps to hedge the variable interest cash
flows associated with the forecasted issuance and rollover of short-term, fixed
rate negotiable certificates of deposit (CD). In these hedging relationships,
UNBC hedges the LIBOR component of the CD rates, which is either 3-month LIBOR
or 6-month LIBOR, based on the CDs' original term to maturity, which reflects
their repricing frequency. Net payments to be received under the cap contract
offset the increase in interest expense caused by the relevant LIBOR index
rising above the cap's strike rate.

UNBC uses interest rate cap corridors to hedge the variable cash flows
associated with the forecasted issuance and roll-over of short-term, fixed
rate, negotiable CDs. In these hedging relationships, UNBC hedges the LIBOR
component of the CD rates, either 1-month LIBOR, 3-month LIBOR, or 6-month
LIBOR, based on the original

                                     F-64

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

term to maturity of the CDs, which reflects their repricing frequency. Net
payments to be received under the cap corridor contracts offset the increase in
deposit interest expense caused by the relevant LIBOR index rising above the
corridor's lower strike rate, but only to the extent the index rises to the
upper strike rate. The corridor will not provide protection from increases in
the relevant LIBOR index to the extent it rises above the corridor's upper
strike rate.

Hedging transactions are structured at inception so that the notional amounts
of the hedge are matched with an equal principal amount of loans or CDs, the
index and repricing frequencies of the hedge matches those of the loans or CDs,
and the period in which the designated hedged cash flows occurs is equal to the
term of the hedge. As such, most of the ineffectiveness in the hedging
relationship results from the mismatch between the timing of reset dates on the
hedge versus those of the loans or CDs. In 2003, UNBC recognized a net gain of
$0.5 million due to ineffectiveness, which is recognized in Non-interest
expense, compared to a net gain of $0.4 million in 2002.

For cash flow hedges, based upon amounts included in accumulated other
comprehensive income at March 31, 2004, the Group expects to include
approximately (Yen)2.7 billion in net interest income for the fiscal year
ending March 31, 2005. This amount could differ from amounts actually realized
due to changes in interest rates and the addition of other hedges subsequent to
March 31, 2004.

Fair Value Hedges--Hedging Strategy for Mandatorily Redeemable Preferred
Securities of Subsidiary Grantor Trust

UNBC engages in an interest rate hedging strategy in which an interest rate
swap is associated with a specific interest bearing liability, Mandatorily
Redeemable Preferred Securities of Subsidiary Grantor Trust ("Trust Preferred
Securities"), in order to convert the liability from a fixed rate to a floating
rate instrument. This strategy mitigates the changes in fair value of the
hedged liability caused by changes in the designated benchmark interest rate,
US dollar LIBOR. Fair value hedging transactions are structured at inception so
that the notional amounts of the swap match an associated principal amount of
the Trust Preferred Securities. The interest payment dates, the expiration
date, and the embedded call option of the swap match those of the Trust
Preferred Securities. The ineffectiveness on the fair value hedges during 2003
was a net loss of $0.1 million, compared to a net gain of $0.6 million in 2002.

23. OBLIGATIONS UNDER GUARANTEES AND OTHER OFF-BALANCE-SHEET INSTRUMENTS

Obligations under Guarantees

The Group provides customers with a variety of guarantees and similar
arrangements, including standby letters of credit, financial and performance
guarantees, credit protections, liquidity facilities, other off-balance-sheet
credit-related supports and similar instruments, in order to meet the
customers' financial and business needs. The table below summarizes the
contractual or notional amounts with regard to obligations under guarantees and
similar arrangements at March 31, 2003 and 2004. The contractual or notional
amounts of these instruments represent the maximum potential amounts of future
payments without consideration of possible recoveries under recourse provisions
or from collateral held or pledged.

For certain types of derivatives, such as written interest rate options and
written currency options, the maximum potential future payments are unlimited.
Accordingly, it is impracticable to estimate such maximum potential amount of
future payments. As such, the notional amounts of the related contracts, other
than the maximum potential payments, are included in the table.

                                     F-65

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


The Group mitigates credit risk exposure resulting from guarantees by utilizing
various techniques, including collateralization in the form of cash,
securities, and real properties based on management's credit assessment of the
guaranteed parties and the related credit profile. In order to manage the
credit risk exposure, the Group also enters into sub-participation contracts
with third parties who will fund a portion of the credit facility and bear its
share of the loss to be incurred in the event that the borrower fails to
fulfill its obligations. The following table includes unfunded commitments of
(Yen)76.7 billion and (Yen)116.3 billion, respectively, at March 31, 2003 and
2004, which are participated out to third parties. Contractual or notional
amounts summarized in the following table may not necessarily bear any direct
relationship to the future actual credit exposure, primarily because of those
risk management techniques.

<TABLE>
<CAPTION>
                                                     Maximum
                                                   potential/                Amount by expiration period
                                                   Contractual -------------------------------------------------------
                                                   or Notional  Less than     1-2        2-3        3-5       Over 5
At March 31, 2003                                    amount      1 year      years      years      years      years
-----------------                                  ----------- ----------- ---------- ---------- ---------- ----------
                                                                              (in billions)
<S>                                                <C>         <C>         <C>        <C>        <C>        <C>
Standby letters of credit and financial guarantees (Yen) 3,661 (Yen) 1,488 (Yen)  232 (Yen)  291 (Yen)  383 (Yen)1,267
Performance guarantees............................       1,070         734        149         85         61         41
Liquidity facilities..............................       1,348       1,348         --         --         --         --
Derivative instruments............................      28,672      23,633      1,293      1,156      1,928        662
Other.............................................           2           2         --         --         --         --
                                                   ----------- ----------- ---------- ---------- ---------- ----------
   Total.......................................... (Yen)34,753 (Yen)27,205 (Yen)1,674 (Yen)1,532 (Yen)2,372 (Yen)1,970
                                                   =========== =========== ========== ========== ========== ==========
</TABLE>

<TABLE>
<CAPTION>
                                                     Maximum
                                                   potential/                Amount by expiration period
                                                   Contractual -------------------------------------------------------
                                                   or Notional  Less than     1-2        2-3        3-5       Over 5
At March 31, 2004                                    amount      1 year      years      years      years      years
-----------------                                  ----------- ----------- ---------- ---------- ---------- ----------
                                                                              (in billions)
<S>                                                <C>         <C>         <C>        <C>        <C>        <C>
Standby letters of credit and financial guarantees (Yen) 2,561 (Yen) 1,043 (Yen)  198 (Yen)  159 (Yen)  252 (Yen)  909
Performance guarantees............................       1,192         654        199        128        126         85
Liquidity facilities..............................         555         555         --         --         --         --
Derivative instruments............................      20,731      16,135      1,339      1,121      1,557        579
Other.............................................         309         309         --         --         --         --
                                                   ----------- ----------- ---------- ---------- ---------- ----------
   Total.......................................... (Yen)25,348 (Yen)18,696 (Yen)1,736 (Yen)1,408 (Yen)1,935 (Yen)1,573
                                                   =========== =========== ========== ========== ========== ==========
</TABLE>

Nature of guarantee contracts

Standby letters of credit and financial guarantees generally include an
obligation of an issuer or a designated third party to guarantee the
performance of the customer to the beneficiary under the terms of contracts
such as lending contracts and other similar financial transactions. The Group
is required to make payments to the guaranteed parties in the events that the
customers fail to fulfill the obligations under the contracts. The guarantees
whose contractual maturities are over 5 years are mainly comprised of
guarantees of housing loans.

Performance guarantees are the contracts that contingently require the Group to
make payments to the guaranteed party based on another party's failure to
perform under an obligating agreement, except financial obligation. For
example, performance guarantees include guarantees of completion of
construction projects.

Liquidity facilities may include a provision of guarantees of collection of
contractual cash flows under an asset securitization structure, involving
variable interest entities. Such guarantee provisions protect beneficiary of

                                     F-66

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

assets securitization from negative returns relating to shortfalls of cash
collections on the underlying assets held by the securitization vehicle. See
Note 24 for additional information on the Group's operations regarding variable
interest entities.

Derivative instruments that are deemed to be included within the definition of
guarantees as prescribed in FIN No. 45 include certain written options and
credit default swaps. In order for the Group to determine if those derivative
instruments meet the definition of guarantees as prescribed in FIN No. 45, the
Group has to track whether the counterparties are actually exposed to the
losses that will result from the adverse change in the underlyings.
Accordingly, the Group has disclosed information on all credit default swaps
and certain written options that have possibilities to meet the definition of
guarantees as prescribed in FIN No. 45, regardless of whether the
counterparties have assets or liabilities related to the underlyings of the
derivatives.

Other includes contingent consideration agreements and security lending
indemnifications. Contingent consideration agreements provide guarantees on
additional payments to acquired insurance agencies' shareholders based on the
agencies' future performance in excess of established revenue and/or earnings
before interest, taxes, depreciation and amortization thresholds. Security
lending indemnifications are the indemnifications for institutional customers
of securities lending transactions against counterparty default. All lending
transactions are collateralized, primarily by cash.

Carrying amount

At March 31, 2003 and 2004, the carrying amounts of the liabilities related to
guarantees and similar instruments set forth above were (Yen)205,574 million
and (Yen)233,257 million, respectively, which are included in Other liabilities
and Trading account liabilities. In addition, Other liabilities also include an
allowance for off-balance-sheet instruments of (Yen)48,720 million and
(Yen)73,092 million, respectively, related to these transactions.

Other Off-Balance-Sheet Instruments

In addition to obligations under guarantees set forth above, the Group issues
other off-balance-sheet instruments for purposes other than trading. Such
off-balance-sheet instruments consist of lending-related commitments, including
commitments to extend credit and commercial letters of credit that the Group
provides to meet the financing needs of its customers. Once the Group issues
these financial instruments, the Group is required to extend credit to or make
certain payments to the customers or beneficiaries specified pursuant to the
underlying contracts unless otherwise provided in the contracts. Since many of
these commitments expire without being drawn upon, the total commitment amounts
do not necessarily represent future cash requirements. At March 31, 2004,
approximately 74% of these commitments will expire within one year, 24% from
one year to five years and 2% after five years. The table below summarizes the
contractual amounts with regard to these commitments at March 31, 2003 and 2004.

<TABLE>
<CAPTION>
                                                2003        2004
                                             ----------- -----------
                                                  (in billions)
            <S>                              <C>         <C>
            Commitments to extend credit.... (Yen)22,849 (Yen)22,857
            Commercial letters of credit....         387         377
            Resale and repurchase agreements         407         206
            Securities lending transactions.          83          --
            Commitments to make investments.          33          39
</TABLE>

                                     F-67

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


Commitments to extend credit, which generally have fixed expiration dates or
other termination clauses, are legally binding agreements to lend to customers.
Commitments are different from guarantees in that the commitments are generally
revocable or have provisions that enable the Group to avoid payments in the
event of violations of any conditions of the contracts and certain
deterioration of the potential borrowers' financial condition. Commitments to
extend credit may expire without being drawn upon. Therefore, the total
commitment amounts do not necessarily represent future cash requirements.

Commercial letters of credit, used for facilitating trade transactions, are
generally secured by underlying goods. The Group continually monitors the type
and amount of collateral and other security, and requires counterparties to
provide additional collateral or guarantors as necessary.

Repurchase and resale transactions are collateralized financing agreements. In
a sale of securities or other financial instruments with agreement to
repurchase them, the Group sells securities or other financial instruments at a
stated price to a counterparty and agrees to repurchase identical financial
instruments from the same counterparty at a later date at the predetermined
price which reflect the principal amount and interest. In a purchase of
securities or other financial instruments with agreement to resell them, the
Group receives securities or other financial instruments for a stated price
from a counterparty and agrees to sell them to the same counterparty at a later
date at the predetermined price reflecting the principal amount and interest.
When certain conditions specified in SFAS No. 140 are met, the Group accounts
for resale agreements as purchase of financial instruments with related
off-balance-sheet forward resale commitments and repurchase agreements as sale
of financial instruments with related off-balance-sheet forward repurchase
agreements. The Group bears the off-balance-sheet risk related to the forward
resale and repurchase commitments, including credit risk and market risk.

Securities lending transactions involve the lending of securities borrowed from
other financial institutions or customers' securities held in custody to third
party borrowers. The Group generally obtains collateral from borrowers,
including cash and securities, with similar fair value. The Group follows
strict levels of collateralization governed by daily mark-to-market analyses
and a review of the creditworthiness of borrowers to control exposure to credit
losses resulting from a reduction in the underlying collateral value and
nonperformance by borrowers.

Commitments to make investments are legally binding contracts to make
additional contributions to corporate recovery or private equity investment
funds in accordance with limited partnership agreements. Some of these funds,
in which the Group has significant variable interests, are described in Note 24.

Concentration of Credit Risk

Although the Group's portfolio of financial instruments, including
on-balance-sheet instruments, is widely diversified along industry and
geographic lines, a significant portion of the transactions with
off-balance-sheet risk are entered into with other financial institutions.

24. VARIABLE INTEREST ENTITIES

A variable interest entity ("VIE") is defined as an entity with the following
characteristics; (1) equity investment at risk is not sufficient to permit the
entity to finance its activities without additional subordinated financial
support from other parties, or (2) providers of equity investment at risk lack
significant decision making ability or do not absorb the expected losses or
receive the expected residual returns. Variable interests in a variable
interest entity are contractual, ownership, or other pecuniary interests in an
entity that change with changes in the fair value of the entity's net assets
exclusive of variable interests. An enterprise shall consolidate a variable
interest entity if

                                     F-68

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

that enterprise has a variable interest that will absorb a majority of the
entity's expected losses, receive a majority of the entity's expected returns,
or both. An enterprise that consolidates a VIE is referred to as the primary
beneficiary.

In the normal course of its business, the Group is a party to various entities
which may be deemed to be variable interest entities such as asset-backed
commercial paper conduits, securitization of client properties, various
investment funds and project finances.

Asset-backed Commercial Paper Conduits

The Group administers several third-party owned, multi-seller finance companies
(primarily commercial paper conduits) that purchase financial assets, primarily
pools of receivables, from third-party customers. Assets purchased by these
conduits are generally funded by issuing commercial paper, or partly by
borrowings from the Group or third parties. While customers basically continue
to service the transferred trade receivables, the Group underwrites,
distributes, makes a market in commercial paper issued by the conduits, and
also provides liquidity and credit support facilities to the entities.

In accordance with the requirement to apply FIN No. 46 immediately to VIEs
created after January 31, 2003, the Group consolidated commercial paper
conduits with total assets of (Yen)47,129 million as of March 31, 2004. The
consolidation did not have material impact on the Group's results of
operations. In addition to such consolidated VIEs, the Group, as not deemed to
be the primary beneficiary, had variable interests in certain other conduits
with total assets of (Yen)325,779 million as of March 31, 2004, and is exposed
to a maximum loss of (Yen)30,221 million, excluding older entities created
before February 1, 2003, set out below.

It is expected that the Group would be required to consolidate additional
conduits as FIN No. 46R becomes effective to older entities in the fiscal year
ending March 31, 2005. Total assets of older entities expected to be
consolidated upon adoption of FIN No. 46R are estimated as (Yen)2,974,888
million and the Group's maximum exposure to loss as a result of its involvement
with such conduits is estimated at (Yen)2,297,583 million.

Securitization of Client Properties

The Group administers several third-party owned conduits that purchase clients
assets, primarily real estate, from third-party customers. Assets purchased by
these conduits are generally funded by investments under partnership agreements
from customers or by borrowings from the Group or third-parties. While
customers basically continue to use the transferred real estate by lease-back
agreements, the customers that invest in conduits absorb the expected losses of
the conduits.

The Group, as a non-primary beneficiary, had variable interests in this type of
VIEs, with total assets of (Yen)651,704 million as of March 31, 2004, and is
exposed to a maximum loss of (Yen)136,905 million, excluding the older entities
created before February 1, 2003, set out below.

It is expected that the Group would be required to consolidate additional
entities as FIN No. 46R becomes effective to older entities in the fiscal year
ending March 31, 2005. Total assets of older entities expected to be
consolidated upon adoption of FIN No. 46R are estimated as (Yen)37,916 million
and the Group's maximum exposure to loss as a result of its involvement with
such funds is estimated at (Yen)37,916 million.

                                     F-69

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


Investment Funds

The Group holds investments in various investment funds that collectively
invest in equity and debt securities including listed Japanese securities and
investment grade bonds, and, to a limited extent, securities and other
interests issued by companies in a start-up or restructuring stage. Such
investment funds are managed by investment advisory companies or fund
management companies that make investment decisions and administer the funds.

In accordance with the requirement to apply FIN No. 46 immediately to VIEs
created after January 31, 2003, the Group consolidated investment funds with
total assets of (Yen)124,357 million as of March 31, 2004. The consolidation
did not have material impact on the Group's results of operations. In addition
to such consolidated VIEs, the Group, as a non-primary beneficiary, had
variable interests in this type of VIEs, with total assets of (Yen)12,847,847
million as of March 31, 2004, and is exposed to a maximum loss of (Yen)377,296
million, excluding the older entities set out below.

It is expected that the Group would be required to consolidate additional
investment funds as FIN No. 46R becomes effective in the fiscal year ending
March 31, 2005. Total assets of older entities expected to be consolidated upon
adoption of FIN No. 46R are estimated as (Yen)272,298 million and the Group's
maximum exposure to loss as a result of its involvement with such funds is
estimated at (Yen)244,301 million.

Special Purpose Entities Created for Structured Financing

The Group extends non-recourse asset-backed loans to special purpose entities,
which hold beneficial interests in real properties, to provide financing for
special purpose projects including real estate development and natural resource
development managed by third parties. The Group generally acts as a member of a
lending group and does not have any equity investment in the entities, which is
typically provided by project owners. For most of these financings, the equity
provided by the project owners is of sufficient level to absorb expected
losses, while expected returns to the owners are arranged to be the most
significant among all returns. Accordingly, the Group determined that the Group
is not the primary beneficially of most of these entities. However, in
transactions with entities whose investment at risk is exceptionally thin and
the Group's share of financing is dominant, the Group is ultimately required to
consolidate this type of entity.

The Group, as a non-primary beneficiary, had variable interests in this type of
VIEs, with total assets of (Yen)10,099,191 million as of March 31, 2004, and is
exposed to a maximum loss of (Yen)527,742 million, excluding the older entities
created before February 1, 2003, set out below.

It is expected that the Group would be required to consolidate additional
entities as FIN No. 46R becomes effective in the fiscal year ending March 31,
2005. Total assets of older entities expected to be consolidated upon adoption
of FIN No. 46R are estimated as (Yen)32,264 million and the Group's maximum
exposure to loss as a result of its involvement with such funds is estimated at
(Yen)19,628 million.

Repackaged Instruments

The Group repackages financial instruments to create new financial instruments
with features that match the customer's needs and preferences. The Group
purchases financial instruments such as bonds and transfers them

                                     F-70

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

to special purpose entities which then issue new instruments. The special
purpose entities may enter into derivative transactions including interest rate
and currency swaps with the Group or other financial institutions to modify the
cash flows of the underlying financial instruments. The Group underwrites and
markets to the Group's customers the new instruments issued by the special
purpose entities.

In accordance with the requirement to apply FIN No. 46 immediately to VIEs
created after January 31, 2003, the Group consolidated these special purpose
entities with total assets of (Yen)45,597 million as of March 31, 2004. The
consolidation did not have material impact on the Group's results of
operations. In addition to such consolidated VIEs, the Group, as a non-primary
beneficiary, had variable interests in this type of VIE, with total assets of
(Yen)1,241,867 million as of March 31, 2004, and is exposed to a maximum loss
of (Yen)121,596 million, excluding the older entities created before February
1, 2003, set out below.

It is expected that the Group would be required to consolidate additional
conduits as FIN No. 46R become effective to older entities in the fiscal year
ending March 31, 2005. Total assets of older entities expected to be
consolidated upon adoption of FIN No. 46R are estimated as (Yen)275,580 million
and the Group's maximum exposure to loss as a result of its involvement with
such conduits is estimated at (Yen)263,209 million.

Financing Vehicle

UNBC Finance Trust I ("grantor trust") is wholly owned by UNBC, a U.S.
subsidiary of BTM and a public company. Prior to December 31, 2003, the grantor
trust's notes and related investment in the grantor trust's notes were
eliminated in consolidation and the preferred securities were reflected as a
liability in the accompanying financial statements.

UNBC deconsolidated the grantor trust upon adoption of FIN No. 46 in UNBC's
fiscal year ended December 31, 2003. The Group consolidated UNBC's financial
statements as of December 31, 2003 in the Group's fiscal year ended March 31,
2004. As a result, FIN No. 46 is partially applied to VIEs created before
February 1, 2003 with regard to the grantor trust of UNBC in the Group
consolidated financial statements. The impact of this change in accounting
principles was to increase other assets by (Yen)1,157 million and to reflect
the full amount of the liability of the grantor trust's notes, which increased
liabilities by (Yen)1,157 million.

Management is evaluating whether the Group shall deconsolidate similar
financing vehicles as FIN No. 46R becomes effective to older entities in the
fiscal year ending March 31, 2005.

Other Type of VIEs

The Group is also a party to other type of VIEs, such as special purpose
entities created to hold assets on behalf of the Group as an intermediary. The
Group, as a non-primary beneficiary, had variable interests in such VIEs, with
total assets of (Yen)5,537 million as of March 31, 2004, and is exposed to a
maximum loss of (Yen)4,380 million, excluding the older entities set out below.

It is expected that the Group would be required to consolidate additional
entities as FIN No. 46R becomes effective to older entities in the fiscal year
ending March 31, 2005. Total assets of older entities expected to be
consolidated upon adoption of FIN No. 46R are estimated as (Yen)10,339 million
and the Group's maximum exposure to loss as a result of its involvement with
such VIEs is estimated at (Yen)11,441 million.

The Group has consolidated certain special purpose entities, which may be
variable interest entities, under current accounting guidance. At March 31,
2004, total assets of such consolidated entities were immaterial. As the Group
intends to continue assessing and analyzing the impact of FIN No. 46R for
future and existing arrangements and interests in various entities. Such
assessment and analysis may result in additional entities that will need to be
consolidated or disclosed by the Group in the fiscal year ending March 31, 2005.

                                     F-71

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


25. COMMITMENTS AND CONTINGENT LIABILITIES

The Group leases certain office space and equipment under noncancelable
agreements expiring through the fiscal year 2015.

Future minimum rental commitments for noncancelable leases at March 31, 2004
were as follows:

<TABLE>
<CAPTION>
                                                Capitalized   Operating
                                                  leases       leases
                                                -----------  -----------
                                                     (in millions)
       <S>                                      <C>          <C>
       Fiscal year ending March 31:
          2005................................. (Yen)17,757  (Yen)12,898
          2006.................................      14,307       11,735
          2007.................................      10,403       10,919
          2008.................................       4,970        8,621
          2009.................................       1,335        7,318
          2010 and thereafter..................       2,981       25,519
                                                -----------  -----------
              Total minimum lease payments.....      51,753  (Yen)77,010
                                                             ===========
       Amount representing interest............      (1,790)
                                                -----------
       Present value of minimum lease payments. (Yen)49,963
                                                ===========
</TABLE>

Total rental expense for the fiscal years ended March 31, 2002, 2003 and 2004
was (Yen)34,692 million, (Yen)40,616 million and (Yen)36,528 million,
respectively.

The Group is involved in various litigation matters. Managements, based upon
their current knowledge and results of consultation with counsel, make
appropriate level of litigation reserve. The amounts of the Group's liabilities
when ultimately determined will not have a material adverse effect on the
Group's results of operations and financial position.

26. FEES AND COMMISSIONS INCOME

Details of fees and commissions income for the fiscal years ended March 31,
2002, 2003 and 2004 were as follows:

<TABLE>
<CAPTION>
                                                               2002         2003         2004
                                                           ------------ ------------ ------------
                                                                       (in millions)
<S>                                                        <C>          <C>          <C>
Trust fees................................................ (Yen) 22,363 (Yen) 21,424 (Yen) 19,503
Fees on funds transfer and service charges for collections       53,402       54,922       57,002
Fees and commissions on international business............       52,537       53,560       53,149
Fees and commissions on credit card business..............       44,882       57,083       60,456
Service charges on deposits...............................       29,791       34,626       36,210
Fees and commissions on securities business...............       33,391       49,217       79,014
Other fees and commissions................................       99,553      113,545      135,553
                                                           ------------ ------------ ------------
   Total.................................................. (Yen)335,919 (Yen)384,377 (Yen)440,887
                                                           ============ ============ ============
</TABLE>

                                     F-72

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


Trust fees consist of fees earned primarily by fiduciary asset management and
administration services for corporate pension plans, investment funds, etc.
Fees on funds transfer and service charges for collection are earned by
providing settlement services such as domestic fund remittances and domestic
collection services. Fees and commissions on international business primarily
consist of fees from international fund transfer and collection services, and
trade-related financing services. Fees and commissions on credit card business
are composed of interchange income, annual fees, royalty and other service
charges from franchisees. Service charges on deposits are fees charged for
deposits such as checking account deposits. Other fees and commissions include
fees from fees on guarantees, investment banking services including
underwriting, brokerage and advisory services, and arrangement fees on
securitizations.

27. BUSINESS SEGMENTS

The business segment information of the Group, set forth below, is derived from
the internal management reporting system used by management to measure the
performance of the business segments. Unlike financial accounting, there is no
authoritative body of guidance for management accounting. The business segment
information, set forth below, is based on the financial information prepared in
accordance with Japanese GAAP along with internal management accounting rules
and practices. Accordingly, the format and information is presented primarily
on the basis of Japanese GAAP and is not consistent with the consolidated
financial statements prepared on the basis of US GAAP. A reconciliation is
provided for the total amounts of segments' total operating profit with income
(loss) from continuing operations before income tax expense (benefit) and
cumulative effect of a change in accounting principle under US GAAP.

See Note 28 for financial information relating to the Group's operations by
geographic area. The geographic financial information is consistent with the
basis of the accompanying consolidated financial statements.

The Group was organized based on a business unit system during the fiscal year
ended March 31, 2004 as follows:

..   The Retail Banking business unit provides banking products and services to
    individual customers in Japan.

..   The Commercial Banking business unit provides banking products and services
    to large corporations and some small and medium-sized companies.

..   The Global Corporate Banking business unit provides banking services to
    large Japanese corporations and their overseas operations as well as
    non-Japanese corporations who do business on a global basis, excluding
    UNBC's customers.

..   The Investment Banking and Asset Management business unit provides advisory
    and other services related to mergers and acquisitions, securities services
    of the Bank, syndicated loans, project financing, derivatives and
    securitization and other investment banking activities, and asset
    management and trust products and services mainly to high net worth
    individuals, branch customers and corporate clients in Japan.

..   The UNBC business unit includes its subsidiaries in California, UnionBanCal
    Corporation and Union Bank of California, N.A.

..   The Operations Services unit provides operations and settlement services to
    the Group's other business units, including settlement and foreign exchange.

..   The Treasury unit conducts the Group's asset and liability management and
    liquidity management.

                                     F-73

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


The Mitsubishi Securities segment includes Mitsubishi Securities and its
subsidiaries that provide a broad range of retail and corporate securities
services and products including retail brokerage, securitization, M&A advisory
and derivatives.

In May 2003, the Group integrated the investment banking business unit and
asset management business unit into one business unit under the name of
investment banking and asset management business unit. Accordingly, the Group
presented the investment banking and asset management business unit as a single
operating segment for the fiscal year ended March 31, 2004. Presentation for
the fiscal years ended March 31, 2002 and 2003 has been reclassified to conform
to the presentation for the fiscal year ended March 31, 2004.

Certain securities subsidiaries of the Bank's investment banking and asset
management business unit located in the United States, Hong Kong and Singapore
were transferred to Mitsubishi Securities during the fiscal year ended March
31, 2004. Accordingly, these securities subsidiaries have been included in
Mitsubishi Securities for the fiscal year ended March 31, 2004. Presentation
for the fiscal years ended March 31, 2002 and 2003 has been reclassified to
conform to the presentation for the fiscal year ended March 31, 2004.

In July 2004, the Bank transferred its overseas securities subsidiary,
Tokyo-Mitsubishi International plc, to Mitsubishi Securities. Tokyo-Mitsubishi
International plc has since been renamed in line with the name of its new
parent company to Mitsubishi Securities International plc. Since the transfer
was made subsequent to March 31, 2004, the business segment information was not
reclassified for the fiscal years ended March 31, 2002, 2003 and 2004 to
reflect this transfer.

In addition, the Bank transferred its custody business, which had been included
in the asset management business unit, to the operation services unit during
the fiscal year ended March 31, 2004. Presentation for the fiscal years ended
March 31, 2002 and 2003 has been reclassified to conform to the presentation
for the fiscal year ended March 31, 2004.

Furthermore, in the UNBC business unit, the measurement methods used to
determine reported segment profit or loss were changed during the fiscal year
ended March 31, 2004. Presentation for the fiscal years ended March 31, 2002
and 2003 has been reclassified to conform to the presentation for the fiscal
year ended March 31, 2004.

                                     F-74

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


The financial performances of the Group's major business units and Mitsubishi
Securities, derived from the internal management reporting system, are
summarized below. Management does not use information on segments' total assets
to allocate resources and assess performance and has not prepared information
on segment assets. Accordingly, business segments' information on total assets
is not available.

<TABLE>
<CAPTION>
                                                                          Investment
                                                              Global       Banking
                                    Retail      Commercial   Corporate    and Asset                Operations
                                    Banking      Banking      Banking     Management      UNBC      Services     Treasury
                                  ------------ ------------ ------------ ------------ ------------ ----------- ------------
<S>                               <C>          <C>          <C>          <C>          <C>          <C>         <C>
Fiscal year ended March 31, 2002:
 Net revenue:
   The Bank:
    Net interest income.......... (Yen)176,297 (Yen)216,041 (Yen)136,872 (Yen)  3,784 (Yen)     -- (Yen)   663 (Yen)152,008
    Net fees.....................       23,314       43,631       68,365       31,820           --       8,934       (5,009)
    Other........................       10,737       26,723       18,956       21,833           --       1,137       57,811
   The Bank's subsidiaries.......       72,787       11,342       57,887       40,605      289,520      19,231        2,265
                                  ------------ ------------ ------------ ------------ ------------ ----------- ------------
     Total.......................      283,135      297,737      282,080       98,042      289,520      29,965      207,075
 Operating expenses..............      230,602      126,834      134,559       55,444      157,263      22,913       28,370
                                  ------------ ------------ ------------ ------------ ------------ ----------- ------------
 Operating profit (loss)......... (Yen) 52,533 (Yen)170,903 (Yen)147,521 (Yen) 42,598 (Yen)132,257 (Yen) 7,052 (Yen)178,705
                                  ============ ============ ============ ============ ============ =========== ============
Fiscal year ended March 31, 2003:
 Net revenue:
   The Bank:
    Net interest income.......... (Yen)165,407 (Yen)196,033 (Yen)125,811 (Yen)  5,961 (Yen)     -- (Yen)   558 (Yen)180,127
    Net fees.....................       29,383       46,250       65,040       28,369           --       7,339       (6,222)
    Other........................       12,645       31,337       24,273       16,800           --         841      111,863
   The Bank's subsidiaries.......       72,534       12,964       47,787       31,500      269,755      16,845        2,068
                                  ------------ ------------ ------------ ------------ ------------ ----------- ------------
     Total.......................      279,969      286,584      262,911       82,630      269,755      25,583      287,836
Operating expenses...............      211,695      126,995      129,945       50,491      155,506      25,502       26,712
                                  ------------ ------------ ------------ ------------ ------------ ----------- ------------
Operating profit (loss).......... (Yen) 68,274 (Yen)159,589 (Yen)132,966 (Yen) 32,139 (Yen)114,249 (Yen)    81 (Yen)261,124
                                  ============ ============ ============ ============ ============ =========== ============
Fiscal year ended March 31, 2004:
 Net revenue:
   The Bank:
    Net interest income.......... (Yen)169,252 (Yen)191,071 (Yen)119,182 (Yen) 11,443 (Yen)     -- (Yen)   646 (Yen)116,822
    Net fees.....................       40,623       49,994       70,304       35,262           --       7,316       (4,194)
    Other........................       19,902       44,939       25,257       33,415           --         752       72,522
   The Bank's subsidiaries.......       73,113       11,661       31,609       34,687      253,456      15,942        1,174
                                  ------------ ------------ ------------ ------------ ------------ ----------- ------------
     Total.......................      302,890      297,665      246,352      114,807      253,456      24,656      186,324
Operating expenses...............      204,065      119,574      120,199       44,292      150,877      23,400       26,253
                                  ------------ ------------ ------------ ------------ ------------ ----------- ------------
Operating profit (loss).......... (Yen) 98,825 (Yen)178,091 (Yen)126,153 (Yen) 70,515 (Yen)102,579 (Yen) 1,256 (Yen)160,071
                                  ============ ============ ============ ============ ============ =========== ============
</TABLE>
<TABLE>
<CAPTION>


                                   Mitsubishi
                                   Securities       Other*         Total
                                  ------------  -------------  --------------
<S>                               <C>           <C>            <C>
Fiscal year ended March 31, 2002:
 Net revenue:
   The Bank:
    Net interest income.......... (Yen)     --  (Yen) (21,416) (Yen)  664,249
    Net fees.....................           --        (40,522)        130,533
    Other........................           --         (4,960)        132,237
   The Bank's subsidiaries.......       16,922          8,571         519,130
                                  ------------  -------------  --------------
     Total.......................       16,922        (58,327)      1,446,149
 Operating expenses..............       25,739         57,001         838,725
                                  ------------  -------------  --------------
 Operating profit (loss)......... (Yen) (8,817) (Yen)(115,328) (Yen)  607,424
                                  ============  =============  ==============
Fiscal year ended March 31, 2003:
 Net revenue:
   The Bank:
    Net interest income.......... (Yen)     --  (Yen) (49,935) (Yen)  623,962
    Net fees.....................           --        (37,185)        132,974
    Other........................           --         (6,972)        190,787
   The Bank's subsidiaries.......       58,521          6,022         517,996
                                  ------------  -------------  --------------
     Total.......................       58,521        (88,070)      1,465,719
Operating expenses...............       69,572         80,008         876,426
                                  ------------  -------------  --------------
Operating profit (loss).......... (Yen)(11,051) (Yen)(168,078) (Yen)  589,293
                                  ============  =============  ==============
Fiscal year ended March 31, 2004:
 Net revenue:
   The Bank:
    Net interest income.......... (Yen)     --  (Yen)   5,830  (Yen)  614,246
    Net fees.....................           --        (45,908)        153,397
    Other........................           --        (59,133)        137,654
   The Bank's subsidiaries.......      140,621          4,247         566,510
                                  ------------  -------------  --------------
     Total.......................      140,621        (94,964)      1,471,807
Operating expenses...............      112,008         40,848         841,516
                                  ------------  -------------  --------------
Operating profit (loss).......... (Yen) 28,613  (Yen)(135,812) (Yen)  630,291
                                  ============  =============  ==============
</TABLE>
--------
*Other includes the Systems Services unit, the eBusiness & IT Initiatives unit,
 and the Corporate Center and eliminates overlapping allocation.

Management measures performance of each business unit by "operating profit,"
which includes profits or losses of the Bank's subsidiaries. Financial
information of each of the Bank's subsidiaries is assigned to only one business
unit, based on its major products or services provided and its major type of
customers. "Operating profit" is a defined term in the Bank's regulatory
reporting to the FSA.

"Net revenue" above includes net interest income, net fees (that is, fees and
commissions received, net of fees paid and other related expenses), and other
gains, such as net trading gains, net foreign exchange gains, and net gains
from sales of debt investment securities measured under Japanese GAAP. Interest
income and expenses between business units are determined using an internal
transfer pricing system, based on current market rates.

"Operating expenses" include salaries and employee benefits, occupancy and
certain other non-interest expenses. In determining operating profit, the Group
does not assign to each business unit certain income and expense items such as
specific provisions for loan loss reserve, equity investment securities gains
or losses, minority

                                     F-75

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

interest in earnings or losses of the Bank's subsidiaries, equity in earnings
or losses of the Bank's affiliated companies, goodwill amortization and
impairment, net gains or losses from disposition of premises and equipment, and
other non-interest income and expense items.

Frequently, the business units work together in connection with providing
services to customers. In accordance with the Group's internal management
accounting policies, the Group does not apportion the net revenue relating to a
particular transaction among the participating business units. Instead, the
Group assigns the total amount of net revenue relating to each of these
transactions to each participating business unit. As a result, some items of
net revenue are recorded as part of the operating results of more than one
business unit. Any overlapping allocations are eliminated in the "Other"
column. The following is a summary of the aggregate amounts of this overlapping
allocation of net revenue for the business units for the fiscal years ended
March 31, 2002, 2003 and 2004:

<TABLE>
<CAPTION>
                                                                   Global      Total
                                            Retail   Commercial   Corporate    amount
                                            Banking   Banking      Banking   eliminated
                                            -------- ----------- ----------- -----------
                                                           (in millions)
<S>                                         <C>      <C>         <C>         <C>
Fiscal year ended March 31, 2002:
   Investment Banking and Asset Management. (Yen) -- (Yen) 7,837 (Yen)30,157 (Yen)37,994
Fiscal year ended March 31, 2003:
   Investment Banking and Asset Management.       --       9,722      28,709      38,431
Fiscal year ended March 31, 2004:
   Investment Banking and Asset Management.      319      25,282      37,970      63,571
</TABLE>

Reconciliation

As set forth above, the measurement bases and the income and expenses items
covered are very different between the internal management reporting system and
the accompanying consolidated statements of operations. Therefore, it is
impracticable to present reconciliations of the business segments' total
information, other than operating profit, to corresponding items in the
accompanying consolidated statements of operations.

Reconciliations of the segments' operating profit under the internal management
reporting system for the fiscal years ended March 31, 2002, 2003 and 2004 above
to income (loss) from continuing operations before income tax expense (benefit)
and cumulative effect of a change in accounting principle shown on the
consolidated statements of operations are as follows:

<TABLE>
<CAPTION>
                                                                                    2002       2003       2004
                                                                                 ---------  ---------  ---------
                                                                                          (in billions)
<S>                                                                              <C>        <C>        <C>
Operating profit:............................................................... (Yen) 607  (Yen) 589  (Yen) 630
                                                                                 ---------  ---------  ---------
   Credit (provision) for credit losses.........................................      (446)      (237)       142
   Trading account profits (losses)--net........................................        11         50        (85)
   Equity investment securities gains (losses)--net.............................       (26)      (171)       251
   Debt investment securities gains (losses)--net...............................         9        142       (122)
   Foreign exchange gains (losses)--net.........................................      (172)        28        172
   Gains (losses) on other real estate owned....................................        (5)        --          1
   Goodwill amortization........................................................        (5)        --         --
   Minority interest............................................................       (23)        (4)       (46)
   Other--net...................................................................      (166)      (107)       (71)
                                                                                 ---------  ---------  ---------
Income (loss) from continuing operations before income tax expense (benefit) and
  cumulative effect of a change in accounting principle......................... (Yen)(216) (Yen) 290  (Yen) 872
                                                                                 =========  =========  =========
</TABLE>

                                     F-76

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


28. FOREIGN ACTIVITIES

Foreign operations include the business conducted by overseas offices, as well
as international business conducted from domestic offices, principally several
international banking-related divisions of the Bank's Head Office in Tokyo, and
involve various transactions with debtors and customers residing outside Japan.
Close integration of the Group's foreign and domestic activities makes precise
estimates of the amounts of assets, liabilities, income and expenses
attributable to foreign operations difficult and necessarily subjective.
Assets, income and expenses attributable to foreign operations are allocated to
geographical areas based on the domiciles of the debtors and customers.

Generally, interest rates with respect to funds borrowed and loaned between
domestic and foreign operations are based on prevailing money market rates
appropriate for the transactions. In general, the Group has allocated all
direct expenses and a proportionate share of general and administrative
expenses to income derived from foreign loans and other transactions by the
Group's foreign operations. The following table sets forth estimated total
assets at March 31, 2002, 2003 and 2004, and estimated total revenue, total
expenses, income (loss) from continuing operations before income tax expense
(benefit) and cumulative effect of a change in accounting principle and net
income (loss) for the respective fiscal years then ended.

<TABLE>
<CAPTION>
                                              Domestic                               Foreign
                                          ---------------  ------------------------------------------------------------
                                                               United                      Asia/Oceania
                                                              States of                     excluding        Other
                                               Japan           America         Europe         Japan          areas*
                                          ---------------  --------------- -------------- -------------- --------------
                                                                                  (in millions)
<S>                                       <C>              <C>             <C>            <C>            <C>
Fiscal year ended March 31, 2002:
    Total revenue........................ (Yen)   828,034  (Yen)   557,866 (Yen)  235,383 (Yen)  239,274 (Yen)  120,545
    Total expenses.......................       1,222,206          521,989        192,850        185,259         75,128
    Income (loss) from continuing
     operations before income tax
     expense (benefit) and cumulative
     effect of a change in accounting
     principle...........................        (394,172)          35,877         42,533         54,015         45,417
    Net income (loss)....................        (282,577)          11,441         46,113         49,862         42,490
    Total assets at end of fiscal year...      55,382,956       10,488,984      5,391,593      3,030,691      2,336,930
Fiscal year ended March 31, 2003:
    Total revenue........................ (Yen) 1,025,459  (Yen)   455,876 (Yen)  292,240 (Yen)  131,352 (Yen)   80,350
    Total expenses.......................       1,007,256          369,793        177,622         83,326         57,705
    Income from continuing operations
     before income tax expense and
     cumulative effect of a change in
     accounting principle................          18,203           86,083        114,618         48,026         22,645
    Net income...........................          22,046           55,558        112,197         37,749         21,428
    Total assets at end of fiscal year...      56,675,468       10,294,825      5,895,574      2,986,840      1,827,680
Fiscal year ended March 31, 2004:
    Total revenue........................ (Yen) 1,309,068  (Yen)   396,448 (Yen)  217,023 (Yen)   72,038 (Yen)  108,694
    Total expenses.......................         707,807          364,768         70,148         20,085         68,665
    Income from continuing operations
     before income tax expense and
     cumulative effect of a change in
     accounting principle................         601,261           31,680        146,875         51,953         40,029
    Net income...........................         370,042           25,718         90,268         30,938         20,635
    Total assets at end of fiscal year...      66,416,026        9,521,917      4,624,635      2,731,246      1,764,728
</TABLE>
<TABLE>
<CAPTION>




                                               Total
                                          ---------------

<S>                                       <C>
Fiscal year ended March 31, 2002:
    Total revenue........................ (Yen) 1,981,102
    Total expenses.......................       2,197,432
    Income (loss) from continuing
     operations before income tax
     expense (benefit) and cumulative
     effect of a change in accounting
     principle...........................        (216,330)
    Net income (loss)....................        (132,671)
    Total assets at end of fiscal year...      76,631,154
Fiscal year ended March 31, 2003:
    Total revenue........................ (Yen) 1,985,277
    Total expenses.......................       1,695,702
    Income from continuing operations
     before income tax expense and
     cumulative effect of a change in
     accounting principle................         289,575
    Net income...........................         248,978
    Total assets at end of fiscal year...      77,680,387
Fiscal year ended March 31, 2004:
    Total revenue........................ (Yen) 2,103,271
    Total expenses.......................       1,231,473
    Income from continuing operations
     before income tax expense and
     cumulative effect of a change in
     accounting principle................         871,798
    Net income...........................         537,601
    Total assets at end of fiscal year...      85,058,552
</TABLE>
--------
* Other areas primarily include Canada, Latin America and the Caribbean.

                                     F-77

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


The following is an analysis of certain asset and liability accounts related to
foreign activities at March 31, 2003 and 2004:

<TABLE>
<CAPTION>
                                                                                      2003            2004
                                                                                 --------------- ---------------
                                                                                          (in millions)
<S>                                                                              <C>             <C>
Cash and due from banks......................................................... (Yen)   444,557 (Yen)   345,224
Interest-earning deposits in other banks........................................       2,880,021       2,768,630
                                                                                 --------------- ---------------
       Total.................................................................... (Yen) 3,324,578 (Yen) 3,113,854
                                                                                 =============== ===============
Trading account assets.......................................................... (Yen) 1,547,977 (Yen) 1,599,546
                                                                                 =============== ===============
Investment securities........................................................... (Yen) 4,092,220 (Yen) 3,522,218
                                                                                 =============== ===============
Loans--net of unearned income and deferred loan fees............................ (Yen) 9,365,138 (Yen) 8,274,090
                                                                                 =============== ===============
Deposits, principally time deposits and certificates of deposit by foreign banks (Yen)10,090,802 (Yen)11,811,672
                                                                                 =============== ===============
Funds borrowed:
   Call money, funds purchased, and receivables under repurchase agreements
     and securities lending transactions........................................ (Yen) 1,384,191 (Yen) 1,201,061
   Other short-term borrowings..................................................         400,627         224,470
   Long-term debt...............................................................       1,059,348       1,043,960
                                                                                 --------------- ---------------
       Total.................................................................... (Yen) 2,844,166 (Yen) 2,469,491
                                                                                 =============== ===============
Trading account liabilities..................................................... (Yen) 1,085,528 (Yen) 1,356,919
                                                                                 =============== ===============
</TABLE>

At March 31, 2002, 2003 and 2004, the Group had no cross-border outstandings,
as defined in the Securities Act Industry Guides 3, in any foreign country,
which exceeded 0.75% of consolidated total assets.

                                     F-78

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


29. ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS

Quoted market prices, when available, are used to estimate fair values of
financial instruments. However, quoted market prices are not available for a
substantial portion of financial instruments and, therefore, fair values for
such financial instruments are estimated using discounted cash flow models or
other valuation techniques. Although management uses its best judgment in
estimating fair values of financial instruments, estimation methodologies and
assumptions used to estimate fair values are inherently subjective.
Accordingly, the estimates presented herein are not necessarily indicative of
net realizable or liquidation values. The use of different estimation
methodologies and/or market assumptions may have a significant effect on the
estimated fair values. The estimated fair values of financial instruments do
not include valuations of related intangible assets such as core deposits.

The following is a summary of carrying amounts and estimated fair values of
financial instruments at March 31, 2003 and 2004:

<TABLE>
<CAPTION>
                                                                              2003                    2004
                                                                     ----------------------- -----------------------
                                                                      Carrying   Estimated    Carrying   Estimated
                                                                       amount    fair value    amount    fair value
                                                                     ----------- ----------- ----------- -----------
                                                                                      (in billions)
<S>                                                                  <C>         <C>         <C>         <C>
Financial assets:
   Cash, due from banks, call loans and funds sold, and receivables
     under resale agreements and securities borrowing
     transactions................................................... (Yen)10,326 (Yen)10,326 (Yen)13,017 (Yen)13,017
   Trading account assets, excluding derivatives....................       4,602       4,602       5,743       5,743
   Investment securities............................................      16,801      16,801      21,339      21,339
   Loans, net of allowance for credit losses........................      38,934      39,174      39,282      39,437
   Other financial assets...........................................       1,630       1,630       1,759       1,759
   Derivative financial instruments:
       Trading activities...........................................       3,280       3,280       2,295       2,295
       Activities qualifying for hedges.............................          15          15           5           5
Financial liabilities:
   Non-interest-bearing deposits, call money and funds purchased,
     and payables under repurchase agreements and securities
     lending transactions...........................................      13,153      13,153      14,157      14,157
   Interest-bearing deposits........................................      49,017      49,029      51,197      51,194
   Debentures.......................................................         636         638         266         266
   Trading account liabilities, excluding derivatives...............         206         206         220         220
   Obligations to return securities received as collateral..........         929         929       2,296       2,296
   Other short-term borrowings......................................       1,543       1,543       4,379       4,379
   Long-term debt...................................................       4,607       4,768       5,087       5,173
   Other financial liabilities......................................       1,745       1,745       1,761       1,761
   Derivative financial instruments:
       Trading activities...........................................       3,130       3,130       2,183       2,183
</TABLE>

                                     F-79

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


The methodologies and assumptions used to estimate the fair value of the
financial instruments are summarized below.

Cash, due from banks, call loans and funds sold, and receivables under resale
agreements and securities borrowing transactions--For cash, due from banks
including interest-earning deposits, and call loans and funds sold, the
carrying amounts are a reasonable estimate of the fair values because of their
short-term nature and limited credit risk. For receivables under resale
agreements and securities borrowing transactions, the fair values are based on
quoted market prices, when available, or estimated with reference to quoted
market prices for similar instruments when quoted market prices are not
available.

Trading account securities--Trading account securities and short trading
positions of securities are carried at fair value, which is principally based
on quoted market prices, when available. If the quoted market prices are not
available, fair values are based on quoted market prices of comparable
instruments.

Investment securities--The fair values of investment securities, where quoted
market prices or secondary market prices are available, are equal to such
market prices. For investment securities, when quoted market prices or
secondary market prices are not available, the fair values are estimated using
quoted market prices for similar securities or based on appraised value as
deemed appropriate by management. The fair value of investment securities other
than those classified as available for sale or being held to maturity (i.e.,
nonmarketable equity securities) at March 31, 2003 and 2004 were not readily
determinable. Therefore, the above summary does not include the carrying
amounts of such investment securities amounting to (Yen)113 billion and
(Yen)160 billion at March 31, 2003 and 2004, respectively.

Loans--The fair values of loans are estimated for groups of similar
characteristics, including type of loan, credit quality and remaining maturity.
In incorporating the credit risk factor, management concluded that the
allowance for credit losses adequately adjusts the related book values for
credit risk. For floating- or adjustable-rate loans, which mature or are
repriced within a short period of time, the carrying values are considered to
be a reasonable estimate of fair values. For fixed-rate loans, market prices
are not generally available and the fair values are estimated by discounting
the estimated future cash flows based on the contracted maturity of the loans.
The discount rates are based on the current market rates corresponding to the
applicable maturity. Where quoted market prices or estimated fair values are
available, primarily for loans to refinancing countries, loans held for
dispositions or sales and certain other foreign loans, the fair values are
based on such market prices and estimated fair values, including secondary
market prices. For nonperforming loans, the fair values are generally
determined on an individual basis by discounting the estimated future cash
flows and may be based on the appraisal value of underlying collateral as
appropriate.

Other financial assets--The estimated fair values of other financial assets,
which primarily include accrued interest receivable, customers' acceptance
liabilities and accounts receivable, approximate their carrying amounts.

Derivative financial instruments--The estimated fair values of derivative
financial instruments are the amounts the Group would receive or pay to
terminate the contracts at the balance-sheet date, taking into account the
current unrealized gains or losses on open contracts. They are based on market
or dealer quotes when available. Valuation models such as present value and
option pricing models are applied to current market information to estimate
fair values when such quotes are not available.

Non-interest-bearing deposits, call money and funds purchased, payables under
repurchase agreements and securities lending transactions, and obligations to
return securities received as collateral--The fair values of
non-interest-bearing deposits are equal to the amounts payable on demand. For
call money and funds purchased, the carrying amounts are a reasonable estimate
of the fair values because of their short-term nature. For payables

                                     F-80

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

under repurchase agreements and securities lending transactions and obligations
to return securities received as collateral, the fair values are generally
based on quoted market prices, when available, or estimated using quoted market
prices for similar instruments when quoted market prices are not available.

Interest-bearing deposits--The fair values of demand deposits, deposits at
notice, and certificates of deposit maturing within a short period of time are
the amounts payable on demand. Fair values of time deposits and certificates of
deposit maturing after a short period of time are estimated by discounting the
estimated cash flows using the rates currently offered for deposits of similar
remaining maturities or the applicable current market rates.

Debentures--The fair values of debentures are estimated using a discounted cash
flow model based on quoted market rates or, if available, secondary market
rates currently available for debentures with similar terms and remaining
maturities.

Other short-term borrowings--For most other short-term borrowings, the carrying
amounts are a reasonable estimate of the fair values because of their
short-term nature. For certain borrowings, fair values are estimated by
discounting the estimated future cash flows using applicable current market
interest rates or comparable rates for similar instruments, which represent the
Group's cost to raise funds with a similar remaining maturity.

Long-term debt--For convertible bonds and certain subordinated debt, the fair
values are estimated based on quoted market prices of the instruments. The fair
value of other long-term debt are estimated using a discounted cash flow model
based on rates applicable to the Group for debt with similar terms and
remaining maturities.

Other financial liabilities--The estimated fair values of other financial
liabilities, which primarily include accrued interest payable, bank
acceptances, accounts payable and obligations under standby letters of credit
and guarantees, approximate their carrying amounts. Effective January 1, 2003,
the Group adopted the initial recognition and measurement provisions of FIN No.
45, which requires that, for guarantees within the scope of FIN No. 45 issued
or amended after December 31, 2002, liability for the fair value of the
obligations undertaken in issuing the guarantees be initially measured at fair
value. The fair values of obligations under standby letters of credit and
guarantees are based on fees received or receivable by the Group.

The fair values of certain off-balance-sheet financial instruments held for
purposes other than trading, including commitments to extend credit and
commercial letters of credit, are estimated using the fees currently charged to
enter into similar agreements, taking into account the remaining terms of the
agreements and the credit quality. The aggregate fair value of such instruments
at March 31, 2003 and 2004 was not material.

The fair value estimates presented herein are based on pertinent information
available to management as of March 31, 2003 and 2004. These amounts have not
been comprehensively revalued since that date and, therefore, current estimates
of fair values may have changed significantly from the amounts presented herein.

30. STOCK-BASED COMPENSATION

Two subsidiaries of the Bank, Mitsubishi Securities and UnionBanCal Corporation
("UNBC"), have several stock-based compensation plans.

Mitsubishi Securities

Under the Code, companies are permitted to purchase their own shares in the
market in order to implement a stock option plan when approved by the
shareholders.

                                     F-81

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


Pursuant to resolutions approved at the general shareholders' meetings,
Mitsubishi Securities offers stock option plans which provide directors,
executive officers, eligible employees and certain other persons with options
to purchase shares (at the respective exercise prices stipulated in each plan)
as follows:

<TABLE>
<CAPTION>
          Date of approval
      at the shareholders' meeting        Exercise period         Shares
      ----------------------------        ---------------         ------
      <S>                          <C>                           <C>
             June 29, 2000........ July 1, 2002 to June 30, 2005 2,057,000
             June 28, 2001........ July 1, 2003 to June 30, 2006 2,272,000
                                                                 ---------
      Total..................................................... 4,329,000
                                                                 =========
</TABLE>

The plans provide for the granting of stock options having an exercise price
not less than the market value of Mitsubishi Securities' common stock on the
date of grant. Following is the option activity for the period from September
1, 2002 to March 31, 2003 and for the fiscal year ended March 31, 2004:

<TABLE>
<CAPTION>
                                                      2003                              2004
                                        --------------------------------- ---------------------------------
                                                         Weighted-average                  Weighted-average
                                        Number of shares  exercise price  Number of shares  exercise price
                                        ---------------- ---------------- ---------------- ----------------
<S>                                     <C>              <C>              <C>              <C>
Options outstanding, September 1, 2002
  or beginning of fiscal year..........    5,512,000        (Yen)1,278        5,512,000       (Yen)1,278
   Granted.............................           --                --               --               --
   Exercised...........................           --                --         (831,000)             812
   Forfeited...........................           --                --       (1,528,000)           1,568
                                           ---------                         ----------
Options outstanding, end of fiscal year    5,512,000        (Yen)1,278        3,153,000       (Yen)1,260
                                           =========                         ==========
Options exercisable, end of fiscal year    3,403,000        (Yen)1,566        3,153,000       (Yen)1,260
                                           =========                         ==========
</TABLE>

The following table details the distribution of stock options outstanding at
March 31, 2004:

<TABLE>
<CAPTION>
                                                                     Options exercisable at
                     Options outstanding at March 31, 2004               March 31, 2004
                 --------------------------------------------- -----------------------------------
                             Weighted-average
   Range of        Number       remaining     Weighted-average                    Weighted-average
exercise prices  outstanding contractual life  exercise price  Number exercisable  exercise price
---------------  ----------- ---------------- ---------------- ------------------ ----------------
<S>              <C>         <C>              <C>              <C>                <C>
(Yen)812 - 1,546  3,153,000     1.64 years       (Yen)1,260        3,153,000         (Yen)1,260
</TABLE>

UNBC

UNBC has two management stock plans. The Year 2000 UnionBanCal Corporation
Stock Plan, effective January 1, 2000 (the "2000 Stock Plan"), and the
UnionBanCal Corporation Management Stock Plan, restated effective June 1, 1997
(the "1997 Stock Plan"), have 16.0 million and 6.6 million shares,
respectively, of the UNBC's common stock authorized to be awarded to key
employees and outside directors of UNBC at the discretion of the Executive
Compensation and Benefits Committee of the Board of Directors (the
"Committee"). Employees on rotational assignment from the Bank are not eligible
for stock awards.

The Committee determines the term of each stock option grant, up to a maximum
of ten years from the date of grant. The exercise price of the options issued
under the Stock Plans shall not be less than the fair market value on the date
the option is granted. Unvested restricted stock issued under the Stock Plans
is shown as a reduction to retained earnings. The value of the restricted
shares at the date of grant is amortized to compensation expense over its
vesting period. All cancelled or forfeited options and restricted stock become
available for future grants.

                                     F-82

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


In 2001, 2002 and 2003, UNBC granted options to non-employee directors and
various key employees, including policy-making officers under the 2000 Stock
Plan. Under both Stock Plans, options granted to employees vest pro-rata on
each anniversary of the grant date and become fully exercisable three years
from the grant date, provided that the employee has completed the specified
continuous service requirement. The options vest earlier if the employee dies,
is permanently disabled, or retires under certain grant, age, and service
conditions. Options granted to non-employee directors are fully vested on the
grant date and exercisable 33 1/3 percent on each anniversary under the 1997
Stock Plan, and fully vested and exercisable on the grant date under the 2000
Stock Plan. The following is a summary of stock option transactions under the
Stock Plans.

<TABLE>
<CAPTION>
                                                                         Fiscal years ended December 31,
                                              --------------------------------------------------------------------
                                                         2001                         2002
                                              --------------------------- ---------------------------- -----------
                                              Number of  Weighted-average  Number of  Weighted-average  Number of
                                               shares     exercise price    shares     exercise price    shares
                                              ---------  ---------------- ----------  ---------------- ----------
<S>                                           <C>        <C>              <C>         <C>              <C>
Options outstanding, beginning of fiscal year 5,191,899       $28.47       7,939,271       $29.79       8,515,469
   Granted................................... 3,448,242        30.03       2,911,652        43.49       2,517,023
   Exercised.................................  (557,597)       19.02      (2,187,170)       28.57      (1,912,323)
   Forfeited.................................  (143,273)       29.91        (148,284)       34.05        (112,158)
                                              ---------                   ----------                   ----------
Options outstanding, end of fiscal year...... 7,939,271       $29.79       8,515,469       $34.71       9,008,011
                                              =========                   ==========                   ==========
Options exercisable, end of fiscal year...... 3,009,555       $29.53       3,031,478       $31.08       3,845,520
                                              =========                   ==========                   ==========
</TABLE>
<TABLE>
<CAPTION>

                                              -----------------
                                               2003
                                              -----------------
                                              Weighted-average
                                               exercise price
                                              ----------------
<S>                                           <C>
Options outstanding, beginning of fiscal year      $34,71
   Granted...................................       40.32
   Exercised.................................       30.52
   Forfeited.................................       38.96

Options outstanding, end of fiscal year......      $37.12

Options exercisable, end of fiscal year......      $33.99

</TABLE>

The weighted-average fair value of options granted was $10.38 during 2001,
$16.67 during 2002, and $12.92 during 2003.

The fair value of each option grant is estimated on the date of grant using the
Black-Scholes option pricing model with the following weighted-average
assumptions used for grants made in 2001, 2002 and 2003:

<TABLE>
<CAPTION>
                                         2001     2002     2003
                                       -------  -------  -------
              <S>                      <C>      <C>      <C>
              Risk-free interest rate.     4.9%     4.9%     2.9%
              Expected lives.......... 5 years  5 years  5 years
              Expected volatility.....      45%      46%      43%
              Expected dividend yields     3.4%     2.3%     2.8%
</TABLE>

The following table summarizes information about stock options outstanding.

<TABLE>
<CAPTION>
                                                                 Options exercisable at
                  Options outstanding at December 31, 2003         December 31, 2003
                --------------------------------------------- ----------------------------
                            Weighted-average
   Range of       Number       remaining     Weighted-average   Number    Weighted-average
exercise prices outstanding contractual life  exercise price  exercisable  exercise price
--------------- ----------- ---------------- ---------------- ----------- ----------------
<S>             <C>         <C>              <C>              <C>         <C>
$ 18.29 - 25.00    113,269     4.5 years          $22.47         113,269       $22.47
  27.56 - 40.50  6,067,111           7.4           34.29       2,818,885        31.33
  42.40 - 57.50  2,827,631           8.1           43.77         913,366        43.65
                 ---------                                     ---------
                 9,008,011                                     3,845,520
                 =========                                     =========
</TABLE>

In each of 2001, 2002 and 2003, UNBC also granted 6,000 shares of restricted
stock with weighted average grant date fair values of $37.10, $45.00 and
$46.95, respectively, to key officers, including policy-making officers, under
the 2000 Stock Plan. The awards of restricted stock vest pro-rata on each
anniversary of the grant date and become fully vested four years from the grant
date, provided that the employee has completed the specified continuous service
requirement. They vest earlier if the employee dies, is permanently and totally
disabled, or retires under certain grant, age, and service conditions.
Restricted shareholders have the right to vote their restricted shares and
receive dividends.

                                     F-83

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


At December 31, 2001, 2002 and 2003, 4,556,724 shares, 1,764,414 shares and
5,347,715 shares, respectively, were available for future grants as either
stock options or restricted stock under the 2000 Stock Plan.

Effective January 1, 1997, UNBC established a Performance Share Plan. Eligible
participants may earn performance share awards to be redeemed in cash three
years after the date of grant. Performance shares are linked to shareholder
value in two ways: (1) the market price of the UNBC's common stock; and (2)
return on equity, a performance measure closely linked to value creation.
Eligible participants generally receive grants of performance shares annually.
The total number of performance shares granted under the plan cannot exceed
600,000. UNBC granted 72,000 shares in 2001, 61,500 shares in 2002, and 43,500
shares in 2003. No performance shares were forfeited in 2002 or 2003. In 2001,
7,250 performance shares were forfeited. The value of a performance share is
equal to the market price of UNBC's common stock. All cancelled or forfeited
performance shares become available for future grants. Expenses related to
these shares were $3.3 million each in both 2001 and 2002, and $6.6 million in
2003.

31. RELATED PARTY TRANSACTIONS

Transactions with MTFG, Mitsubishi Trust and their subsidiaries

Since the formation of MTFG, Mitsubishi Trust and its subsidiaries have been
related parties which are under common control by MTFG. In addition,
subsidiaries of MTFG other than wholly-owned banking subsidiaries (i.e. the
Bank and Mitsubishi Trust) are related parties of the Bank.

The Bank lends and borrows funds from such related parties as a course of its
normal banking activities. In addition, the Bank acts as an agency for
Mitsubishi Trust and offers trust products to its customers on behalf of
Mitsubishi Trust.

The following table shows the amount of transactions with its related parties
under common control by MTFG for the fiscal years ended March 31, 2002, 2003
and 2004.

<TABLE>
<CAPTION>
                                                                              2002    2003    2004
                                                                            ------- ------- -------
                                                                                 (in billions)
<S>                                                                         <C>     <C>     <C>
Interest income, primarily resulted from interest earning deposits in other
  banks:................................................................... (Yen)24 (Yen)14 (Yen) 7
Interest expense, primarily resulted from payables under securities lending
  transactions and long-term debts:........................................      15      17      10
Non-interest income:.......................................................       2       3       3
Non-interest expense:......................................................       5       6       5
</TABLE>

The following table shows the amounts due from or to its related parties under
common control by MTFG at March 31, 2003 and 2004.

<TABLE>
<CAPTION>
                                                                                               2003      2004
                                                                                           ---------- --------
                                                                                              (in billions)
<S>                                                                                        <C>        <C>
Assets, primarily consisted of interest-earning deposits in other banks and call loans and
  funds sold:............................................................................. (Yen)  541 (Yen)517
Liabilities, primarily consisted of call money and funds purchased and payables under
  securities lending transactions:........................................................      1,136      710
</TABLE>

                                     F-84

<PAGE>

              THE BANK OF TOKYO-MITSUBISHI, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Concluded)


32. EVENTS SINCE MARCH 31, 2004

Approval of Dividends

On June 28, 2004, the shareholder approved payment of cash dividends to the
shareholder of record on March 31, 2004 of (Yen)41.25 per share of preferred
Stock, totaling (Yen)3,358 million, and of (Yen)30.79 per share of common
stock, totaling (Yen)154,549 million.

Mitsubishi Motors Corporation

Mitsubishi Motors Corporation ("MMC") is a major automotive manufacturing
company in Japan. In April 2004, Daimler Chrysler, the largest shareholders of
MMC, announced to withdraw from providing any financial support to MMC and its
consolidated subsidiaries (the "MMC Group"). In May 2004, MMC released a new
business revitalization plan without the support by Daimler Chrysler, which
contains a reduction in costs and financial support from other shareholders
including the Bank. Under its business revitalization plan, MMC received
payments totaling (Yen)295 billion for the issue of preferred stocks during
June 2004. The payments included (Yen)130 billion from the Bank.

The Group had an investment in shares of common stock issued by MMC of (Yen)8.6
billion at March 31, 2004. These shares were classified as available-for-sale
securities and were measured at fair value based on the quoted market price as
of March 31, 2004, in accordance with SFAS No. 115, "Accounting for Certain
Investments in Debt and Equity Securities." Per share quoted market price of
MMC was at (Yen)263 as of March 31, 2004, but declined to a price level below
(Yen)80 per share in August 2004, after hitting over (Yen)300 per share in mid
April. Based on a price level around (Yen)100 per share in September 2004,
significant part of the Group's investment in MMC's common stock has been lost
subsequent to March 31, 2004.

Planned Management Integration with the UFJ Group

In August 2004, four companies of the MTFG Group, MTFG, the Bank, Mitsubishi
Trust and Mitsubishi Securities, concluded a basic agreement with four
companies of the UFJ Group, UFJ Holdings, Inc. ("UFJ"), UFJ Bank Limited ("UFJ
Bank"), UFJ Trust Bank Limited and UFJ Tsubasa Securities Co., Ltd., regarding
the management integration of the holding companies, banks, trust banks and
securities companies of the two groups, subject to the approval by the
shareholders and the relevant authorities. On September 10, 2004, MTFG, UFJ and
UFJ Bank entered into an agreement with regard to the MTFG Group's cooperation
in strengthening the UFJ Group's capital. Pursuant to the terms of the
agreement, on September 17, 2004, UFJ Bank issued 3.5 billion preferred shares
and MTFG purchased those shares for (Yen)700 billion.

Diamond Computer Service to Become MTFG's Wholly Owned Subsidiary

On August 26, 2004, MTFG announced that Diamond Computer Service, Co. Ltd.,
currently the Bank's equity method investee, will become a wholly owned
subsidiary of MTFG by December 22, 2004 through a share exchange, subject to
approval by Diamond Computer Service's shareholders and the relevant
authorities.

                                     *****

                                     F-85

<PAGE>

                                   SIGNATURE

The registrant hereby certifies that it meets all of the requirements for
filing on Form 20-F and that it has duly caused and authorized the undersigned
to sign this Annual Report on its behalf.

                                           THE BANK OF TOKYO MITSUBISHI,
                                             LTD.

                                           By:... /s/ NOBUO KUROYANAGI
                                                  -----------------------------
                                           Name:.   Nobuo Kuroyanagi
                                           Title:   President

Date: September 28, 2004


<PAGE>

                                 EXHIBIT INDEX

<TABLE>
<CAPTION>
Exhibit                                             Description
-------                                             -----------
<C>     <S>

   1(a) Articles of Incorporation of The Bank of Tokyo Mitsubishi, Ltd., as amended and restated on June 28,
        2004. (English Translation)/(1)/

   1(b) Regulations on Corporation Meetings of The Bank of Tokyo Mitsubishi, Ltd., as amended on May 24,
        2002. (Original in Japanese with English Translations)/(3)/

   1(c) Regulations of the Board of Directors of The Bank of Tokyo Mitsubishi, Ltd., as amended on May 24,
        2002. (Original in Japanese with English Translations)/(3)/

   1(d) Regulations on the Handling of Shares of The Bank of Tokyo Mitsubishi, Ltd., as amended and
        restated on June 26, 2003. (English Translation)/(2)/

   2(a) Indenture dated as of February 25, 2000 between The Bank of Tokyo Mitsubishi, Ltd. and The Chase
        Manhattan Bank. /(4)/

   8    Subsidiaries of the Company--see "Item 4.C. Information on the Company--Organizational
        Structure."

  11    Code of ethics of Mitsubishi Tokyo Financial Group, Inc. and compliance rules, compliance manual
        and employee work rules of The Bank of Tokyo Mitsubishi., Ltd. applicable to its directors and
        managing officers, including its principal executive officer, principal financial officer, principal
        accounting officer or controller, or persons performing similar functions. (English translation of
        relevant sections)/(1)/

  12    Certifications required by Rule 13a 14(a) (17 CFR 240.13a 14(a)) or Rule 15d 14(a) (17 CFR 240.15d
        14(a))./(1)/

  13    Certifications required by Rule 13a 14(b) (17 CFR 240.13a 14(b)) or Rule 15d 14(b) (17 CFR
        240.15d 14(b)) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C.
        1350)./(1)/
</TABLE>
--------
(1) Filed herewith.
(2) Incorporated by reference from the Annual Report on Form 20 F filed on
    September 29, 2003.
(3) Incorporated by reference from the Annual Report on Form 20 F filed on
    August 30, 2002.
(4) Incorporated by reference from the Annual Report on Form 20-F filed on
    August 17, 2001.