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

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    FORM 10-Q


             |X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
                       THE SECURITIES EXCHANGE ACT OF 1934


                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2005


                         COMMISSION FILE NUMBER 1-15081


                             UNIONBANCAL CORPORATION
             (Exact name of registrant as specified in its charter)


               DELAWARE                                  94-1234979
       (State of Incorporation)             (I.R.S. Employer Identification No.)


                              400 CALIFORNIA STREET
                      SAN FRANCISCO, CALIFORNIA 94104-1302
              (Address and zip code of principal executive offices)

                  Registrant's telephone number: (415) 765-2969

     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  shorter  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 whether the registrant is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act). Yes X  No
                                               ---  ---
     Number of shares of Common Stock outstanding at July 29, 2005: 144,447,257


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<PAGE>


                    UNIONBANCAL CORPORATION AND SUBSIDIARIES

                                TABLE OF CONTENTS

                                                                           PAGE
                                                                          NUMBER
PART I                                                                    ------

FINANCIAL INFORMATION

  Consolidated Financial Highlights......................................      2
  Item 1. Financial Statements:
    Condensed Consolidated Statements of Income..........................      4
    Condensed Consolidated Balance Sheets................................      5
    Condensed Consolidated Statements of Changes in Stockholders' Equity.      6
    Condensed Consolidated Statements of Cash Flows......................      7
    Notes to Condensed Consolidated Financial Statements.................      8
  Item 2. Management's Discussion and Analysis of Financial Condition and
    Results of Operations:
    Introduction.........................................................     24
    Executive Overview...................................................     24
    Critical Accounting Policies.........................................     25
    Financial Performance................................................     26
    Net Interest Income..................................................     30
    Noninterest Income...................................................     33
    Noninterest Expense..................................................     33
    Income Tax Expense...................................................     34
    Loans................................................................     34
    Cross-Border Outstandings............................................     36
    Reversal of Allowances for Credit Losses.............................     36
    Allowances for Credit Losses.........................................     36
    Nonperforming Assets.................................................     40
    Loans 90 Days or More Past Due and Still Accruing....................     41
    Quantitative and Qualitative Disclosures About Market Risk...........     41
    Liquidity Risk.......................................................     43
    Regulatory Capital...................................................     43
    Business Segments....................................................     44
    Regulatory Matters...................................................     52
    Factors That May Affect Future Results...............................     53
  Item 3. Quantitative and Qualitative Disclosures About Market Risk.....     59
  Item 4. Controls and Procedures........................................     59

PART II

OTHER INFORMATION
  Item 1. Legal Proceedings..............................................     60
  Item 2. Unregistered Sales of Equity Securities and Use of Proceeds....     60
  Item 4. Submission of Matters to a Vote of Security Holders............     60
  Item 6. Exhibits.......................................................     61
  Signatures.............................................................     62


<PAGE>


                          PART I. FINANCIAL INFORMATION
                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
                        CONSOLIDATED FINANCIAL HIGHLIGHTS
                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                                                    AS OF AND FOR THE
                                                                    THREE MONTHS ENDED
                                                                --------------------------
                                                                  JUNE 30,       JUNE 30,    PERCENT
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)                       2004           2005       CHANGE
--------------------------------------------------------------  -----------    -----------  ---------
<S>                                                             <C>            <C>              <C>
RESULTS OF OPERATIONS:
   Net interest income(1).....................................  $   400,661    $   464,874      16.03%
   Reversal of allowance for loan losses......................      (10,000)       (11,000)     10.00
   Noninterest income.........................................      331,010        221,350     (33.13)
   Noninterest expense(2).....................................      376,402        409,190       8.71
                                                                -----------    -----------
   Income before income taxes(1)..............................      365,269        288,034     (21.14)
   Taxable-equivalent adjustment..............................          803          1,018      26.77
   Income tax expense.........................................      133,369         99,834     (25.14)
                                                                -----------    -----------
   Net income.................................................  $   231,097    $   187,182     (19.00)
                                                                ===========    ===========
PER COMMON SHARE:
   Net income--basic..........................................  $      1.56    $      1.29     (17.31)%
   Net income--diluted........................................         1.54           1.27     (17.53)
   Dividends(3)...............................................         0.36           0.41      13.89
   Book value (end of period).................................        26.98          29.51       9.38
   Common shares outstanding (end of period)(4)...............  147,845,160    144,205,458      (2.46)
   Weighted average common shares outstanding--basic(4).......  147,687,350    144,547,697      (2.13)
   Weighted average common shares outstanding--diluted(4).....  150,183,938    147,222,390      (1.97)
BALANCE SHEET (END OF PERIOD):
   Total assets...............................................  $46,295,831    $51,178,058      10.55%
   Total loans................................................   27,594,271     32,498,221      17.77
   Nonaccrual loans...........................................      178,062         66,063     (62.90)
   Nonperforming assets.......................................      183,913         68,945     (62.51)
   Total deposits.............................................   39,367,911     42,730,027       8.54
   Medium and long-term debt..................................      800,988        821,664       2.58
   Junior subordinated debt...................................       16,017         15,564      (2.83)
   Stockholders' equity.......................................    3,988,676      4,254,991       6.68
BALANCE SHEET (PERIOD AVERAGE):
   Total assets...............................................  $44,611,351    $49,465,234      10.88%
   Total loans................................................   26,838,622     32,223,991      20.07
   Earning assets.............................................   40,351,016     44,482,833      10.24
   Total deposits.............................................   37,810,048     40,723,333       7.71
   Stockholders' equity.......................................    3,933,788      4,145,150       5.37
FINANCIAL RATIOS:
   Return on average assets(5)................................         2.08%          1.52%
   Return on average stockholders' equity(5)..................        23.63          18.11
   Efficiency ratio(6)........................................        51.44          60.59
   Net interest margin(1).....................................         3.98           4.18
   Dividend payout ratio......................................        23.08          31.78
   Tangible equity ratio......................................         7.88           7.41
   Tier 1 risk-based capital ratio............................        10.46           8.88
   Total risk-based capital ratio.............................        13.07          11.01
   Leverage ratio.............................................         8.36           7.77
   Allowance for credit losses to total loans(7)..............         1.82           1.47
   Allowance for credit losses to nonaccrual loans(7).........       281.60         721.05
   Net loans charged off (recovered) to average total loans(5)         0.15          (0.02)
   Nonperforming assets to total loans and foreclosed assets..         0.67           0.21
   Nonperforming assets to total assets.......................         0.40           0.13

------------------------------------
<FN>

(1)  Amounts are on a  taxable-equivalent  basis using the federal statutory tax
     rate of 35 percent.
(2)  Included in noninterest  expense at June 30, 2005 was a $4 million reversal
     of the allowance for losses on off-balance sheet commitments.
(3)  Dividends per share reflect dividends declared on UnionBanCal Corporation's
     common stock outstanding as of the declaration date.
(4)  Common  shares  outstanding  reflects  common  shares  issued less treasury
     shares.
(5)  Annualized.
(6)  The efficiency  ratio is noninterest  expense,  excluding  foreclosed asset
     expense  (income)  and  the  provision  for  losses  on  off-balance  sheet
     commitments,  as a percentage  of net interest  income  (taxable-equivalent
     basis) and noninterest income.
(7)  The allowance for credit losses ratios  include the allowance for losses on
     off-balance sheet commitments.
</FN>
</TABLE>


                                       2

<PAGE>


                          PART I. FINANCIAL INFORMATION
                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
                        CONSOLIDATED FINANCIAL HIGHLIGHTS
                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                                                    AS OF AND FOR THE
                                                                     SIX MONTHS ENDED
                                                                --------------------------
                                                                  JUNE 30,       JUNE 30,    PERCENT
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)                       2004           2005       CHANGE
--------------------------------------------------------------  -----------    -----------  ---------
<S>                   <C>                                       <C>            <C>              <C>
RESULTS OF OPERATIONS:
   Net interest income(1).....................................  $   801,884    $   906,728      13.07%
   Reversal of allowance for loan losses......................      (15,000)       (19,000)     26.67
   Noninterest income.........................................      542,215        444,111     (18.09)
   Noninterest expense(2).....................................      749,508        816,657       8.96
                                                                -----------    -----------
   Income before income taxes(1)..............................      609,591        553,182      (9.25)
   Taxable-equivalent adjustment..............................        1,605          2,073      29.16
   Income tax expense.........................................      219,402        181,950     (17.07)
                                                                -----------    -----------
   Net income.................................................  $   388,584    $   369,159      (5.00)
                                                                ===========    ===========
PER COMMON SHARE:
   Net income--basic..........................................  $      2.63    $      2.53      (3.80)%
   Net income--diluted........................................         2.59           2.49      (3.86)
   Dividends(3)...............................................         0.67           0.77      14.93
   Book value (end of period).................................        26.98          29.51       9.38
   Common shares outstanding (end of period)(4)...............  147,845,160    144,205,458      (2.46)
   Weighted average common shares outstanding--basic(4).......  147,543,824    145,765,905      (1.21)
   Weighted average common shares outstanding--diluted(4).....  149,991,567    148,412,390      (1.05)
BALANCE SHEET (END OF PERIOD):
   Total assets...............................................  $46,295,831    $51,178,058      10.55%
   Total loans................................................   27,594,271     32,498,221      17.77
   Nonaccrual loans...........................................      178,062         66,063     (62.90)
   Nonperforming assets.......................................      183,913         68,945     (62.51)
   Total deposits.............................................   39,367,911     42,730,027       8.54
   Medium and long-term debt..................................      800,988        821,664       2.58
   Junior subordinated debt...................................       16,017         15,564      (2.83)
   Stockholders' equity.......................................    3,988,676      4,254,991       6.68
BALANCE SHEET (PERIOD AVERAGE):
   Total assets...............................................  $43,831,266    $48,874,761      11.51%
   Total loans................................................   26,490,239     31,765,930      19.92
   Earning assets.............................................   39,613,622     43,974,939      11.01
   Total deposits.............................................   36,874,787     40,198,996       9.01
   Stockholders' equity.......................................    3,941,855      4,176,724       5.96
FINANCIAL RATIOS:
   Return on average assets(5)................................         1.78%          1.52%
   Return on average stockholders' equity(5)..................        19.82          17.82
   Efficiency ratio(6)........................................        55.72          60.69
   Net interest margin(1).....................................         4.07           4.14
   Dividend payout ratio......................................        25.48          30.43
   Tangible equity ratio......................................         7.88           7.41
   Tier 1 risk-based capital ratio............................        10.46           8.88
   Total risk-based capital ratio.............................        13.07          11.01
   Leverage ratio.............................................         8.36           7.77
   Allowance for credit losses to total loans(7)..............         1.82           1.47
   Allowance for credit losses to nonaccrual loans(7).........       281.60         721.05
   Net loans charged off to average total loans(5)............         0.17          (0.04)
   Nonperforming assets to total loans and foreclosed assets..         0.67           0.21
   Nonperforming assets to total assets.......................         0.40           0.13

-----------------------------------
<FN>

(1)  Amounts are on a  taxable-equivalent  basis using the federal statutory tax
     rate of 35 percent.
(2)  Included in noninterest  expense at June 30, 2005 was a $1 million reversal
     of the allowance for losses on off-balance sheet commitments.
(3)  Dividends per share reflect dividends declared on UnionBanCal Corporation's
     common stock outstanding as of the declaration date.
(4)  Common  shares  outstanding  reflects  common  shares  issued less treasury
     shares.
(5)  Annualized.
(6)  The efficiency  ratio is noninterest  expense,  excluding  foreclosed asset
     expense  (income)  and  the  provision  for  losses  on  off-balance  sheet
     commitments,  as a percentage  of net interest  income  (taxable-equivalent
     basis) and noninterest income.
(7)  The allowance for credit losses ratios  include the allowance for losses on
     off-balance sheet commitments.
</FN>
</TABLE>


                                       3

<PAGE>


ITEM 1. FINANCIAL STATEMENTS

                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                                        FOR THE THREE MONTHS          FOR THE SIX MONTHS
                                                           ENDED JUNE 30,                ENDED JUNE 30,
                                                       -----------------------     ------------------------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)            2004           2005         2004           2005
-----------------------------------------------------  --------       --------     --------      ----------
<S>                                                    <C>            <C>          <C>           <C>
INTEREST INCOME
   Loans.............................................  $328,372       $451,664     $663,701      $  867,429
   Securities........................................   108,064        102,530      213,910         203,299
   Interest bearing deposits in banks................     1,121          1,892        2,029           3,994
   Federal funds sold and securities purchased
     under resale agreements.........................     2,928          5,256        4,887           7,629
   Trading account assets............................       861            998        1,418           1,840
                                                       --------       --------     --------      ----------
     Total interest income...........................   441,346        562,340      885,945       1,084,191
                                                       --------       --------     --------      ----------
INTEREST EXPENSE
   Domestic deposits.................................    32,123         64,792       65,733         119,354
   Foreign deposits..................................     2,761          8,154        4,893          14,330
   Federal funds purchased and securities sold under
     repurchase agreements...........................       552          8,217        1,233          15,672
   Commercial paper..................................     1,051          7,807        2,186          12,367
   Medium and long-term debt.........................     3,693          7,459        6,832          13,991
   Trust notes.......................................       130            238        2,311             476
   Other borrowed funds..............................     1,178          1,817        2,478           3,346
                                                       --------       --------     --------      ----------
     Total interest expense..........................    41,488         98,484       85,666         179,536
                                                       --------       --------     --------      ----------
NET INTEREST INCOME..................................   399,858        463,856      800,279         904,655
   Reversal of allowance for loan losses(1)..........   (10,000)       (11,000)     (15,000)        (19,000)
                                                       --------       --------     --------      ----------
     Net interest income after reversal of allowance
       for loan losses...............................   409,858        474,856      815,279         923,655
                                                       --------       --------     --------      ----------
NONINTEREST INCOME
   Service charges on deposit accounts...............    90,031         80,757      171,127         161,212
   Trust and investment management fees..............    36,788         41,590       72,610          83,553
   Insurance commissions.............................    18,652         19,340       40,387          41,357
   International commissions and fees................    18,102         18,326       35,647          36,000
   Merchant banking fees.............................     7,714         18,114       15,181          24,380
   Foreign exchange gains, net.......................     8,294          9,296       16,638          18,236
   Brokerage commissions and fees....................     8,023          8,605       16,320          17,577
   Card processing fees, net.........................    15,456          6,464       24,248          12,071
   Securities gains (losses), net....................        (4)       (13,313)       1,618         (12,969)
   Other.............................................   127,954         32,171      148,439          62,694
                                                       --------       --------     --------      ----------
     Total noninterest income........................   331,010        221,350      542,215         444,111
                                                       --------       --------     --------      ----------
NONINTEREST EXPENSE
   Salaries and employee benefits....................   217,597        241,653      437,020         481,133
   Net occupancy.....................................    32,173         34,681       63,755          68,206
   Outside services..................................    17,406         27,320       33,865          49,216
   Equipment.........................................    16,883         17,292       34,154          35,025
   Professional services.............................    10,290         20,682       21,593          34,392
   Software..........................................    12,908         15,617       25,903          30,245
   Communications....................................    11,810         11,067       23,968          22,603
   Foreclosed asset expense (income).................        17         (2,577)         536          (2,171)
   Reversal of allowance for losses on off-balance
     sheet commitments(1)............................        --         (4,000)          --          (1,000)
   Other.............................................    57,318         47,455      108,714          99,008
                                                       --------       --------     --------      ----------
     Total noninterest expense.......................   376,402        409,190      749,508         816,657
                                                       --------       --------     --------      ----------
   Income before income taxes........................   364,466        287,016      607,986         551,109
   Income tax expense................................   133,369         99,834      219,402         181,950
                                                       --------       --------     --------      ----------
NET INCOME...........................................  $231,097       $187,182     $388,584      $  369,159
                                                       ========       ========     ========      ==========
NET INCOME PER COMMON SHARE--BASIC...................  $   1.56       $   1.29     $   2.63      $     2.53
                                                       ========       ========     ========      ==========
NET INCOME PER COMMON SHARE--DILUTED.................  $   1.54       $   1.27     $   2.59      $     2.49
                                                       ========       ========     ========      ==========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING--BASIC....   147,687        144,548      147,544         145,766
                                                       ========       ========     ========      ==========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING--DILUTED..   150,184        147,222      149,992         148,412
                                                       ========       ========     ========      ==========
----------------------------
<FN>

(1)  Beginning  in the  quarter  ended  March 31,  2005,  the net  change in the
     allowance  for  losses on  off-balance  sheet  commitments  was  recognized
     separately from the change in the allowance for loan losses.  Prior periods
     have not been restated.
</FN>
</TABLE>

     See accompanying notes to condensed consolidated financial statements.

                                       4

<PAGE>


                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>

                                                      (UNAUDITED)                  (UNAUDITED)
                                                        JUNE 30,    DECEMBER 31,      JUNE 30,
(DOLLARS IN THOUSANDS)                                    2004           2004          2005
----------------------------------------------------  -----------   ------------   -----------
<S>                                                   <C>           <C>            <C>
ASSETS
Cash and due from banks.............................  $ 2,287,708   $  2,111,185   $ 2,339,527
Interest bearing deposits in banks..................      630,451        491,905       279,555
Federal funds sold and securities purchased under
  resale agreements.................................    1,156,650        944,950     2,782,105
                                                      -----------   ------------   -----------
     Total cash and cash equivalents................    4,074,809      3,548,040     5,401,187
Trading account assets..............................      307,334        236,331       321,134
Securities available for sale:
   Securities pledged as collateral.................       77,532        144,240       443,717
   Held in portfolio................................   12,151,635     11,000,754     9,905,235
Loans (net of allowance for loan losses: June 30,
  2004, $501,419; December 31, 2004, $407,156;
  June 30, 2005, $394,972)(1).......................   27,092,852     30,309,800    32,103,249
Due from customers on acceptances...................       52,867         55,914        54,189
Premises and equipment, net.........................      502,204        530,431       520,505
Intangible assets...................................       56,696         61,737        51,766
Goodwill............................................      315,356        450,961       450,669
Other assets........................................    1,664,546      1,759,813     1,926,407
                                                      -----------   ------------   -----------
     Total assets...................................  $46,295,831   $ 48,098,021   $51,178,058
                                                      ===========   ============   ===========
LIABILITIES
Domestic deposits:
   Noninterest bearing..............................  $19,255,245   $ 19,205,596   $20,730,332
   Interest bearing.................................   17,982,340     19,480,868    20,333,740
Foreign deposits:
   Noninterest bearing..............................      733,394        435,999       383,171
   Interest bearing.................................    1,396,932      1,053,373     1,282,784
                                                      -----------   ------------   -----------
     Total deposits.................................   39,367,911     40,175,836    42,730,027
Federal funds purchased and securities sold under
  repurchase agreements.............................      294,597        587,249       611,233
Commercial paper....................................      552,038        824,887     1,102,042
Other borrowed funds................................      180,426        172,549       132,368
Acceptances outstanding.............................       52,867         55,914        54,189
Other liabilities(1)................................    1,042,311      1,157,439     1,455,980
Medium and long-term debt...........................      800,988        816,113       821,664
Junior subordinated debt payable to subsidiary
  grantor trust.....................................       16,017         15,790        15,564
                                                      -----------   ------------   -----------
     Total liabilities..............................   42,307,155     43,805,777    46,923,067
                                                      -----------   ------------   -----------
Commitments and contingencies--See Note 9
STOCKHOLDERS' EQUITY
Preferred stock:
  Authorized 5,000,000 shares, no shares issued
    or outstanding as of June 30, 2004,
    December 31, 2004, and June 30, 2005............           --             --            --
Common stock, par value $1 per share at June 30,
  2004, December 31, 2004 and June 30, 2005:
  Authorized 300,000,000 shares, issued 149,126,860
    shares as of June 30, 2004, 152,191,818 shares
    as of December 31, 2004, and 153,581,401 shares
    as of June 30, 2005.............................      149,127        152,192       153,581
Additional paid-in capital..........................      712,255        881,928       948,611
Treasury stock--1,281,700 shares as of June 30,
  2004, 3,831,900 shares as of December 31, 2004
  and 9,375,943 shares as of June 30, 2005..........      (68,557)      (223,361)     (552,786)
Retained earnings...................................    3,289,676      3,526,312     3,774,097
Accumulated other comprehensive loss................      (93,825)       (44,827)      (68,512)
                                                      -----------   ------------   -----------
     Total stockholders' equity.....................    3,988,676      4,292,244     4,254,991
                                                      -----------   ------------   -----------
     Total liabilities and stockholders' equity.....  $46,295,831   $ 48,098,021   $51,178,058
                                                      ===========   ============   ===========
----------------------------
<FN>

(1)  On December 31, 2004,  UnionBanCal  Corporation  transferred  the allowance
     related to losses on off-balance  sheet commitments of $83 million from the
     allowance  for loan  losses to other  liabilities.  At June 30,  2005,  the
     allowance  related  to  losses on  off-balance  sheet  commitments  was $82
     million. Periods prior to December 31, 2004 have not been restated.
</FN>
</TABLE>

     See accompanying notes to condensed consolidated financial statements.


                                       5

<PAGE>


                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
      CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                                                                               ACCUMULATED     TOTAL
                                                           ADDITIONAL                             OTHER        STOCK-
                                       NUMBER     COMMON    PAID-IN    TREASURY    RETAINED   COMPREHENSIVE    HOLDERS'
(IN THOUSANDS, EXCEPT SHARES)        OF SHARES    STOCK     CAPITAL      STOCK     EARNINGS   INCOME (LOSS)    EQUITY
----------------------------------  -----------  --------  ----------  ---------  ----------  -------------  ----------
<S>                                 <C>          <C>       <C>         <C>        <C>         <C>            <C>
BALANCE DECEMBER 31, 2003.........  146,000,156  $146,000  $  555,156  $ (12,846) $2,999,884  $      52,242  $3,740,436
                                                 --------  ----------  ---------  ----------  -------------  ----------
Comprehensive income
  Net income--For the six months
    ended June 30, 2004...........                                                   388,584                    388,584
  Other comprehensive income,
    net of tax:
    Net change in unrealized
      gains on cash flow hedges...                                                                  (37,753)    (37,753)
    Net change in unrealized
      losses on securities
      available for sale..........                                                                 (108,834)   (108,834)
    Foreign currency translation
      adjustment..................                                                                      520         520
                                                                                                             ----------
Total comprehensive income........                                                                              242,517
Dividend reinvestment plan........          308                    17                                                17
Deferred compensation--restricted.
  stock awards....................                                                       130                        130
Stock options exercised...........    1,117,677     1,118      44,687                                            45,805
Stock issued in acquisitions......    2,008,719     2,009     112,569                                           114,578
Common stock repurchased(1).......                               (174)   (55,711)                               (55,885)
Dividends declared on common
  stock, $0.67 per share(2).......                                                   (98,922)                   (98,922)
                                                 --------  ----------  ---------  ----------  -------------  ----------
Net change........................                  3,127     157,099    (55,711)    289,792       (146,067)    248,240
                                    -----------  --------  ----------  ---------  ----------  -------------  ----------
BALANCE JUNE 30, 2004.............  149,126,860  $149,127  $  712,255  $ (68,557) $3,289,676  $     (93,825) $3,988,676
                                    ===========  ========  ==========  =========  ==========  =============  ==========
BALANCE DECEMBER 31, 2004.........  152,191,818  $152,192  $  881,928  $(223,361) $3,526,312  $     (44,827) $4,292,244
                                                 --------  ----------  ---------  ----------  -------------  ----------
Comprehensive income
  Net income--For the six months
    ended June 30, 2005...........                                                   369,159                    369,159
  Other comprehensive income,
    net of tax:
    Net change in unrealized
      losses on cash flow hedges..                                                                  (11,983)    (11,983)
    Net change in unrealized
      losses on securities
      available for sale..........                                                                  (11,949)    (11,949)
    Foreign currency translation
      adjustment..................                                                                      263         263
    Minimum pension liability
      adjustment..................                                                                      (16)        (16)
                                                                                                             ----------
Total comprehensive income........                                                                              345,474
Dividend reinvestment plan........                                                                                   --
Deferred compensation--restricted
  stock awards....................      208,100       208      12,414                 (9,976)                     2,646
Stock options exercised...........    1,181,483     1,181      54,269                                            55,450
Common stock repurchased(1).......                                      (329,425)                              (329,425)
Dividends declared on common
  stock, $0.77 per share(2).......                                                  (111,398)                  (111,398)
                                                 --------  ----------  ---------  ----------  -------------  ----------
Net change........................                  1,389      66,683   (329,425)    247,785        (23,685)    (37,253)
                                    -----------  --------  ----------  ---------  ----------  -------------  ----------
BALANCE JUNE 30, 2005.............  153,581,401  $153,581  $  948,611  $(552,786) $3,774,097  $     (68,512) $4,254,991
                                    ===========  ========  ==========  =========  ==========  =============  ==========
-------------------
<FN>

(1)  Common stock repurchased includes commission costs.

(2)  Dividends are based on UnionBanCal  Corporation's  shares outstanding as of
     the declaration date.
</FN>
</TABLE>

     See accompanying notes to condensed consolidated financial statements.


                                       6

<PAGE>


                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                                                           FOR THE SIX MONTHS
                                                                             ENDED JUNE 30,
                                                                       --------------------------
(DOLLARS IN THOUSANDS)                                                     2004           2005
---------------------------------------------------------------------- -----------    -----------
<S>                                                                    <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income.......................................................... $   388,584    $   369,159
  Adjustments to reconcile net income to net cash provided by
    (used in) operating activities:
    Reversal of allowance for loan losses.............................     (15,000)       (19,000)
    Reversal of allowance for losses on off-balance sheet commitments.          --         (1,000)
    Depreciation, amortization and accretion..........................      66,191         67,862
    Provision for deferred income taxes...............................      36,430         37,984
    Losses (gains) on securities available for sale...................      (1,618)        12,969
    Net increase in prepaid expenses..................................     (85,933)       (99,920)
    Net (increase) decrease in fees and other charges receivable......      40,498        (30,279)
    Net increase (decrease) in accrued expenses.......................      (5,032)        45,783
    Net increase (decrease) in unearned and deferred income...........     (11,035)        56,281
    Net increase (decrease) in other liabilities......................     108,699        149,265
    Net (increase) decrease in other assets, net of acquisitions......     255,613        (30,445)
    Net (increase) decrease in trading account assets.................     (54,405)       (84,803)
    Loans originated for resale.......................................    (263,412)       (90,109)
    Net proceeds from sale of loans originated for resale.............     227,434        198,950
    Other, net........................................................       4,610         (4,952)
                                                                       -----------    -----------
    Total adjustments.................................................     303,040        208,586
                                                                       -----------    -----------
  Net cash provided by (used in) operating activities.................     691,624        577,745
                                                                       -----------    -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
    Proceeds from sales of securities available for sale..............       9,970        505,937
    Proceeds from matured and called securities available for sale....   2,004,222      1,046,619
    Purchases of securities available for sale, net of acquisitions...  (3,664,523)      (803,180)
    Net (increase) decrease in loans, net of acquisitions.............  (1,213,276)    (1,870,930)
    Net cash provided by (paid in) acquisitions.......................      (2,287)            --
    Other, net........................................................     (36,533)       (33,620)
                                                                       -----------    -----------
      Net cash provided by (used in) investing activities.............  (2,902,427)    (1,155,174)
                                                                       -----------    -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
    Net increase (decrease) in deposits, net of acquisitions..........   3,255,271      2,554,191
    Net increase (decrease) in federal funds purchased and securities
      sold under repurchase agreements................................      13,629         23,984
    Net increase (decrease) in commercial paper and other borrowed
      funds...........................................................     (21,894)       236,974
    Repayment of junior subordinated debt.............................    (360,825)            --
    Common stock repurchased..........................................     (55,885)      (329,425)
    Payments of cash dividends........................................     (90,925)      (105,750)
    Other, net........................................................      46,342         55,713
                                                                       -----------    -----------
      Net cash provided by (used in) financing activities.............   2,785,713      2,435,687
                                                                       -----------    -----------
Net increase (decrease) in cash and cash equivalents..................     574,910      1,858,258
Cash and cash equivalents at beginning of period......................   3,499,005      3,548,040
Effect of exchange rate changes on cash and cash equivalents..........         894         (5,111)
                                                                       -----------    -----------
Cash and cash equivalents at end of period............................ $ 4,074,809    $ 5,401,187
                                                                       ===========    ===========
CASH PAID DURING THE PERIOD FOR:
  Interest............................................................ $    88,860    $   162,691
  Income taxes........................................................      95,764         92,654

SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
  Acquisitions:
    Fair value of assets acquired..................................... $   803,713    $        --
    Purchase price:
      Cash............................................................     (21,772)            --
      Stock issued....................................................    (114,578)            --
                                                                       -----------    -----------
    Liabilities assumed............................................... $   667,363    $        --
                                                                       ===========    ===========
  Loans transferred to foreclosed assets (OREO)....................... $     1,057    $       333

</TABLE>

     See accompanying notes to condensed consolidated financial statements.


                                       7

<PAGE>



                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 1--BASIS OF PRESENTATION AND NATURE OF OPERATIONS

     The unaudited condensed  consolidated  financial  statements of UnionBanCal
Corporation and subsidiaries (the Company) have been prepared in accordance with
accounting  principles  generally  accepted in the United  States of America (US
GAAP) for interim financial reporting and the instructions to Form 10-Q and Rule
10-01 of  Regulation  S-X of the Rules and  Regulations  of the  Securities  and
Exchange Commission (SEC).  However,  they do not include all of the disclosures
necessary  for annual  financial  statements  in  conformity  with US GAAP.  The
results of  operations  for the period  ended June 30, 2005 are not  necessarily
indicative of the operating results anticipated for the full year.  Accordingly,
these unaudited condensed  consolidated  financial  statements should be read in
conjunction with the audited  consolidated  financial statements included in the
Company's  Annual Report on Form 10-K for the year ended  December 31, 2004. The
preparation  of financial  statements in  conformity  with US GAAP also requires
management to make estimates and assumptions that affect the reported amounts of
assets and  liabilities  and disclosure of contingent  assets and liabilities at
the date of the  financial  statements  and the reported  amounts of revenue and
expense  during the  reporting  period.  Actual  results could differ from those
estimates.

     UnionBanCal  Corporation is a commercial  bank holding  company and has, as
its major subsidiary, a banking subsidiary,  Union Bank of California, N.A. (the
Bank).  The Company  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.

     Since November 1999 through June 30, 2005, the Company has announced  stock
repurchase plans totaling $900 million, and as of June 30, 2005, the Company was
authorized to repurchase $162 million of the Company's  common stock under these
repurchase  plans.  The Company  repurchased  $210 million,  $40 million and $89
million  of common  stock in 2004,  the first  quarter  of 2005,  and the second
quarter  of 2005,  respectively,  as part of  these  repurchase  plans  (amounts
exclude  commission  costs).  Under a separate stock repurchase  agreement,  the
Company  repurchased $200 million of its common stock in February 2005, from its
majority  owner,  The  Bank  of   Tokyo-Mitsubishi,   Ltd.  (BTM),  which  is  a
wholly-owned  subsidiary of Mitsubishi Tokyo Financial  Group,  Inc. At June 30,
2005, BTM owned  approximately  61 percent of the Company's  outstanding  common
stock.

     Certain  amounts for prior  periods  have been  reclassified  to conform to
current financial statement presentation.

STOCK-BASED COMPENSATION

     As allowed  under the  provisions  of  Statement  of  Financial  Accounting
Standards (SFAS) No. 123, "Accounting for Stock-Based Compensation," as amended,
the Company has chosen to continue to recognize  compensation  expense using the
intrinsic  value-based  method of valuing stock options prescribed in Accounting
Principles  Board  Opinion  (APB)  No.  25,  "Accounting  for  Stock  Issued  to
Employees" and related Interpretations.  Under the intrinsic value-based method,
compensation  cost is measured as the amount by which the quoted market price of
the  Company's  stock at the date of grant  exceeds  the stock  option  exercise
price.

     At June 30, 2005,  the Company had two  stock-based  employee  compensation
plans.  For further  discussion  concerning the Company's  stock-based  employee
compensation plans see Note 15 of the Notes to Consolidated Financial Statements
included in the Annual Report on Form 10-K for the year ended December 31, 2004.
The  value of the  restricted  stock  awards  issued  under  the  plans has been
reflected  in  compensation  expense.  Options  granted  under  the plans had an
exercise price equal to the market value of


                                       8

<PAGE>


                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)

the  underlying  common  stock  on the date of grant  and,  therefore,  were not
included in compensation expense as allowed by current US GAAP.

     The following  table  illustrates the effect on net income and earnings per
share if the Company had applied the fair value  recognition  provisions of SFAS
No.  123  to  stock-based  employee  compensation.   For  the  purpose  of  this
disclosure,  the Company has recognized  compensation expense for graded vesting
on a straight-line basis and without regard for forfeitures.

<TABLE>
<CAPTION>

                                                     FOR THE THREE MONTHS        FOR THE SIX MONTHS
                                                        ENDED JUNE 30,              ENDED JUNE 30,
                                                    ---------------------       ---------------------
(DOLLARS IN THOUSANDS)                                2004         2005           2004         2005
--------------------------------------------------- --------     --------       --------     --------
<S>                                                 <C>          <C>            <C>          <C>
AS REPORTED NET INCOME............................. $231,097     $187,182       $388,584     $369,159
Stock option-based employee compensation expense
  (determined under fair value based method for
  all awards, net of taxes)........................   (6,683)      (5,181)       (13,215)     (10,725)
                                                    --------     --------       --------     --------
Pro forma net income, after stock option-based
  employee compensation expense.................... $224,414     $182,001       $375,369     $358,434
                                                    ========     ========       ========     ========
EARNINGS PER SHARE--BASIC
     As reported................................... $   1.56     $   1.29       $   2.63     $   2.53
     Pro forma..................................... $   1.52     $   1.26       $   2.54     $   2.46
EARNINGS PER SHARE--DILUTED
     As reported................................... $   1.54     $   1.27       $   2.59     $   2.49
     Pro forma..................................... $   1.49     $   1.24       $   2.50     $   2.43

</TABLE>

     Compensation cost associated with the Company's  unvested  restricted stock
issued under the management  stock plan is measured based on the market price of
the  stock  at  the  grant  date  and  is  expensed  over  the  vesting  period.
Compensation  expense  related to  restricted  stock awards for the three months
ended June 30, 2004 and 2005 were $0.1 million and $2.5 million, respectively.

NOTE 2--RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

     ACCOUNTING   FOR   EMPLOYERS'   DISCLOSURES   ABOUT   PENSIONS   AND  OTHER
     POSTRETIREMENT BENEFITS

     In December 2003, the Financial  Accounting  Standards  Board (FASB) issued
SFAS No.  132R,  a  revision  of SFAS No.  132,  "Employers'  Disclosures  about
Pensions and Other Postretirement  Benefits, an amendment of FASB Statements No.
87, 88, and 106." The Statement expands the disclosure  requirements of SFAS No.
132 to include information describing types of plan assets, investment strategy,
measurement  date(s),  plan  obligations,  cash  flows,  and  components  of net
periodic  benefit  costs of  defined  pension  plans and other  defined  benefit
postretirement  plans. The Statement was effective for financial statements with
fiscal years ending after  December 15,  2003,  with  additional  disclosure  of
expected benefits to be paid in each of the next five years and in the aggregate
for the five years  thereafter  required  for fiscal years ending after June 15,
2004. The  disclosures  required under SFAS No. 132R are contained in Note 10 of
these condensed consolidated financial statements.





                                       9

<PAGE>


                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)


NOTE 2--RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (CONTINUED)

     ACCOUNTING FOR SHARE-BASED PAYMENTS

     In December 2004, the FASB issued SFAS No. 123R,  "Share-Based  Payment", a
revision  of SFAS No. 123.  This  Statement  requires  that  compensation  costs
related to  share-based  payment  transactions  be  recognized  in the financial
statements.  Measurement  of the cost of employee  service  will be based on the
grant-date fair value of the equity or liability  instruments  issued. That cost
will be  recognized  over the period  during  which an  employee  is required to
provide service in exchange for the award.  Additionally,  liability awards will
be remeasured each reporting  period.  Statement 123R replaces SFAS No. 123, and
supersedes  APB No.  25.  This  Statement  requires  adoption  using a  modified
prospective application or a modified retrospective  application.  The Statement
is effective for interim  periods  beginning  after June 15, 2005.  However,  on
April 14, 2005,  the SEC issued rule  2005-57,  which allows  companies to delay
implementation  of the Statement to the  beginning of the next fiscal year.  The
Company has not yet concluded on the method of adoption allowed by the Statement
and is  currently  evaluating  the  impact of this  accounting  guidance  on its
financial  condition and results of operations.  Disclosure  required under SFAS
No. 123 is shown in Note 1 of these condensed consolidated financial statements.

     EXCHANGES OF NONMONETARY ASSETS

     In December 2004,  the FASB issued SFAS No. 153,  "Exchanges of Nonmonetary
Assets, an amendment of APB Opinion No. 29." This Statement amends the principle
that exchanges of nonmonetary  assets should be measured based on the fair value
of the assets  exchanged  and more  broadly  provides for  exceptions  regarding
exchanges of  nonmonetary  assets that do not have  commercial  substance.  This
Statement specifies that a nonmonetary  exchange has commercial substance if the
future cash flows of the entity are expected to change significantly as a result
of the exchange.  The provisions of the Statement are effective for  nonmonetary
asset  exchanges  occurring in the fiscal period  beginning after June 15, 2005.
Management believes that adopting this Statement will not have a material impact
on the Company's financial position or results of operations.

     ACCOUNTING CHANGES AND ERROR CORRECTIONS

     In May 2005,  the FASB issued SFAS No. 154,  "Accounting  Changes and Error
Corrections,  a replacement of APB Opinion No. 20 and FASB Statement No. 3." The
Statement  requires that a voluntary  change in accounting  principle be applied
retrospectively  to all prior periods  financial  statements  presented,  unless
impracticable to do so. It also provides that a change in method of depreciation
or amortization for long-lived  nonfinancial  asset be accounted for as a change
in accounting  estimate effected by a change in accounting  principle,  with the
change applied  prospectively and that correction of errors in previously issued
financial  statements  should  be  termed  a  "restatement."  The  Statement  is
effective  for fiscal  years  beginning  after  December  15,  2005.  Management
believes  that adopting this  Statement  will not have a material  impact on the
Company's financial position or results of operations.

     CONSOLIDATION OF VARIABLE INTEREST ENTITIES

     In  January  2003,  the  FASB  issued   Interpretation  No.  46  (FIN  46),
"Consolidation of Variable  Interest  Entities." FIN 46 provides guidance on how
to identify a variable interest entity (VIE), and when the assets,  liabilities,
noncontrolling  interests and results of operations of a VIE need to be included
in a company's consolidated  financial statements.  A VIE exists when either the
total  equity  investment  at risk is not  sufficient  to permit  the  entity to
finance its  activities by itself,  or the equity  investors  lack a controlling


                                       10

<PAGE>


                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)

NOTE 2--RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (CONTINUED)

financial  interest or they have voting  rights  that are not  proportionate  to
their economic  interest.  A company that holds variable  interests in an entity
will need to  consolidate  that entity if the  company's  interest in the VIE is
such that the company will absorb a majority of the VIE's expected losses and/or
receive a majority of the VIE's expected residual returns, if they occur. FIN 46
also  requires  additional   disclosures  by  primary  beneficiaries  and  other
significant variable interest holders.

     In  December  2003,  the FASB issued FIN 46R, a revision of FIN 46. FIN 46R
clarifies  that  only the  holder  of a  variable  interest  can ever be a VIE's
primary  beneficiary.  FIN  46R  delays  the  effective  date  of FIN 46 for all
entities created  subsequent to January 31, 2003 and non-SPE's  (special-purpose
entities)  created prior to February 1, 2003 to reporting  periods  ending after
March 15, 2004.  Entities created prior to February 1, 2004 and defined as SPE's
must apply either the  provisions of FIN 46 or early adopt the provisions of FIN
46R by the first  reporting  period ending after December 15, 2003. The adoption
of FIN 46R on January 1, 2004 did not have a  material  impact on the  Company's
financial position or results of operations.

     ACCOUNTING FOR CERTAIN LOANS ACQUIRED IN A TRANSFER

     In December 2003,  under  clearance of the FASB,  the Accounting  Standards
Executive  Committee  (AcSEC) of the AICPA issued  Statement  of Position  (SOP)
03-3,  "Accounting for Certain Loans or Debt Securities Acquired in a Transfer."
This SOP establishes  accounting standards for discounts on purchased loans when
the discount is attributable  to credit quality.  The SOP requires that the loan
discount,  rather than contractual amounts,  establishes the investor's estimate
of undiscounted expected future principal and interest cash flows as a benchmark
for yield and  impairment  measurements.  The SOP  prohibits  the  carryover  or
creation of a valuation  allowance  in the initial  accounting  for these loans.
This SOP is effective for loans acquired in years  beginning  after December 15,
2004. At adoption,  there was no impact on the Company's  financial  position or
results of operations.

NOTE 3--EARNINGS PER SHARE

     Basic  earnings  per share (EPS) is computed by dividing  net income by the
weighted average number of common shares outstanding during the period.  Diluted
EPS incorporates the dilutive effect of common stock equivalents  outstanding on
an average basis during the period. Stock options are a common stock equivalent.
The following table presents a  reconciliation  of basic and diluted EPS for the
three and six months ended June 30, 2004 and 2005.

<TABLE>
<CAPTION>

                                 THREE MONTHS ENDED JUNE 30,                SIX MONTHS ENDED JUNE 30,
                            --------------------------------------    --------------------------------------
                                   2004                2005                  2004                2005
                            ------------------  ------------------    ------------------  ------------------
(AMOUNTS IN THOUSANDS,
   EXCEPT PER SHARE DATA)     BASIC    DILUTED    BASIC   DILUTED       BASIC    DILUTED    BASIC   DILUTED
--------------------------  --------  --------  --------  --------    --------  --------  --------  --------
<S>                         <C>       <C>       <C>       <C>         <C>       <C>       <C>       <C>
Net Income................  $231,097  $231,097  $187,182  $187,182    $388,584  $388,584  $369,159  $369,159
                            ========  ========  ========  ========    ========  ========  ========  ========
Weighted average common
  shares outstanding......   147,687   147,687   144,548   144,548     147,544   147,544   145,766   145,766
Additional shares due to:
Assumed conversion of
  dilutive stock options..        --     2,497        --     2,674          --     2,448        --     2,646
                            --------  --------  --------  --------    --------  --------  --------  --------
Adjusted weighted average
  common shares
  outstanding.............   147,687   150,184   144,548   147,222     147,544   149,992   145,766   148,412
                            ========  ========  ========  ========    ========  ========  ========  ========
Net income per share......  $   1.56  $   1.54  $   1.29  $   1.27    $   2.63  $   2.59  $   2.53  $   2.49
                            ========  ========  ========  ========    ========  ========  ========  ========
</TABLE>

                                       11

<PAGE>


                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)


NOTE 4--ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

     The following table presents the components of other  comprehensive  income
(loss) and the related tax effect allocated to each component.

<TABLE>
<CAPTION>


                                                               BEFORE
                                                                TAX          TAX       NET OF
(DOLLARS IN THOUSANDS)                                         AMOUNT       EFFECT       TAX
------------------------------------------------------------  ---------    -------    ---------
<S>                                                           <C>          <C>        <C>
FOR THE SIX MONTHS ENDED JUNE 30, 2004:
Cash flow hedge activities:
  Unrealized net losses on hedges arising during the period.  $ (15,832)   $ 6,056    $  (9,776)
  Reclassification adjustment for net gains on hedges
    included in net income..................................    (45,307)    17,330      (27,977)
                                                              ---------    -------    ---------
Net change in unrealized gains on hedges....................    (61,139)    23,386      (37,753)
                                                              ---------    -------    ---------
Securities available for sale:
  Unrealized holding losses arising during the period on
    securities available for sale...........................   (174,632)    66,797     (107,835)
  Reclassification adjustment for net gains on securities
    available for sale included in net income...............     (1,618)       619         (999)
                                                              ---------    -------    ---------
Net change in unrealized losses on securities available
  for sale..................................................   (176,250)    67,416     (108,834)
                                                              ---------    -------    ---------
Foreign currency translation adjustment.....................        842       (322)         520
                                                              ---------    -------    ---------
Net change in accumulated other comprehensive income (loss).  $(236,547)   $90,480    $(146,067)
                                                              =========    =======    =========
FOR THE SIX MONTHS ENDED JUNE 30, 2005:
Cash flow hedge activities:
  Unrealized net losses on hedges arising during the period.  $  (5,712)   $ 2,185    $  (3,527)
  Reclassification adjustment for net gains on hedges
    included in net income..................................    (13,694)     5,238       (8,456)
                                                              ---------    -------    ---------
Net change in unrealized losses on hedges...................    (19,406)     7,423      (11,983)
                                                              ---------    -------    ---------
Securities available for sale:
  Unrealized holding losses arising during the period on
    securities available for sale...........................    (32,319)    12,362      (19,957)
  Reclassification adjustment for net losses on securities
    available for sale included in net income...............     12,969     (4,961)       8,008
                                                              ---------    -------    ---------
Net change in unrealized losses on securities available for
  sale......................................................    (19,350)     7,401      (11,949)
                                                              ---------    -------    ---------
Foreign currency translation adjustment.....................        426       (163)         263
                                                              ---------    -------    ---------
Minimum pension liability adjustment........................        (26)        10          (16)
                                                              ---------    -------    ---------
Net change in accumulated other comprehensive income (loss).  $ (38,356)   $14,671    $ (23,685)
                                                              =========    =======    =========

</TABLE>



                                       12

<PAGE>


                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)


NOTE 4--ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)(CONTINUED)

     The following table presents  accumulated other comprehensive income (loss)
balances.

<TABLE>
<CAPTION>

                                                          NET
                                           NET     UNREALIZED
                                    UNREALIZED  GAINS (LOSSES)      FOREIGN     MINIMUM    ACCUMULATED
                                 GAINS (LOSSES)  ON SECURITES      CURRENCY     PENSION          OTHER
                                       ON CASH      AVAILABLE   TRANSLATION   LIABILITY  COMPREHENSIVE
(DOLLARS IN THOUSANDS)             FLOW HEDGES       FOR SALE    ADJUSTMENT  ADJUSTMENT  INCOME (LOSS)
------------------------------   -------------  -------------   -----------  ----------  -------------
<S>                              <C>            <C>             <C>          <C>         <C>
BALANCE, DECEMBER 31, 2003....   $      43,786  $      22,535   $   (10,293) $   (3,786) $      52,242
Change during the period......         (37,753)      (108,834)          520          --       (146,067)
                                 -------------  -------------   -----------  ----------  -------------
BALANCE, JUNE 30, 2004........   $       6,033  $     (86,299)  $    (9,773) $   (3,786) $     (93,825)
                                 =============  =============   ===========  ==========  =============

BALANCE, DECEMBER 31, 2004....   $       1,429  $     (31,696)  $    (7,870) $   (6,690) $     (44,827)
Change during the period......         (11,983)       (11,949)          263         (16)       (23,685)
                                 -------------  -------------   -----------  ----------  -------------
BALANCE, JUNE 30, 2005........   $     (10,554) $     (43,645)  $    (7,607) $   (6,706) $     (68,512)
                                 =============  =============   ===========  ==========  =============
</TABLE>

NOTE 5--BUSINESS COMBINATIONS

     The following describes the Company's most recent acquisitions:

     On January 16, 2004, the Company completed its acquisition of Business Bank
of California,  a commercial bank  headquartered in San Bernardino,  California,
with $704  million in assets and fifteen  full-service  branches in the Southern
California  Inland  Empire  and the San  Francisco  Bay Area.  The core  deposit
intangibles are being  amortized on an accelerated  basis over an estimated life
of 6 years.

     On August 1, 2004,  the Company  completed its  acquisition of the business
portfolio of CNA Trust Company  (CNAT).  The Company  acquired  total assets and
assumed total  liabilities  of $173 million,  each.  CNAT,  based in Costa Mesa,
California,  was a subsidiary of Chicago-based  CNA Financial  Corporation.  The
identifiable  intangibles  are being  amortized on an accelerated  basis over an
estimated life of 7 years.

     On October 28,  2004,  the Company  completed  its  acquisition  of Jackson
Federal  Bank, a savings bank  headquartered  in Brea,  California.  The Company
acquired  approximately $1.4 billion in total assets and fourteen branches.  The
core deposit  intangibles  are being  amortized on an accelerated  basis over an
estimated life of 7 years.












                                       13

<PAGE>


                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)


NOTE 6--GOODWILL AND INTANGIBLE ASSETS

     The changes in the carrying  amount of goodwill and  intangible  assets for
the six months ended June 30, 2004 and 2005 are reflected in the table below.

<TABLE>
<CAPTION>


                                                         IDENTIFIABLE INTANGIBLE ASSETS
                                                ----------------------------------------------------
                                                CORE DEPOSIT  RIGHTS-TO-          TOTAL IDENTIFIABLE
DOLLARS IN THOUSANDS                  GOODWILL   INTANGIBLES  EXPIRATION   OTHER   INTANGIBLE ASSETS
------------------------------------  --------  ------------  ----------  ------  ------------------
<S>                                   <C>       <C>           <C>         <C>                <C>
Balance, December 31, 2003..........  $226,556  $     22,117  $   27,475  $   --             $49,592
  Amounts recorded during the six
    months ended June 30, 2004......    88,800        15,809          --      --              15,809
  Amortization expense..............        --        (6,269)     (2,436)                     (8,705)
                                      --------  ------------  ----------  ------  ------------------
Balance, June 30, 2004..............  $315,356  $     31,657  $   25,039      --             $56,696
  Amounts recorded during the six
    months ended December 31, 2004..   135,605        13,707          --   2,100              15,807
  Amortization expense..............        --        (8,003)     (2,506)   (257)            (10,766)
                                      --------  ------------  ----------  ------  ------------------
Balance, December 31, 2004..........  $450,961  $     37,361  $   22,533  $1,843             $61,737
  Amounts recorded during the six
    months ended June 30, 2005......        --            --          --      --                  --
  Net adjustment arising during
    contingent period...............      (292)           --          --      --                  --
    Amortization expense............        --        (7,548)     (2,170)   (253)             (9,971)
                                      --------  ------------  ----------  ------  ------------------
Balance, June 30, 2005..............  $450,669  $     29,813  $   20,363  $1,590             $51,766
                                      ========  ============  ==========  ======  ==================
Estimated amortization expense for
  the years ending:
  Remaining 2005....................            $      7,548  $    2,141    $251              $9,940
  2006..............................                   9,571       3,672     389              13,632
  2007..............................                   5,471       3,113     299               8,883
  2008..............................                   3,245       2,622     231               6,098
  2009..............................                   1,764       2,188     178               4,130
  2010..............................                     807       1,805     138               2,749
  thereafter........................                   1,407       4,822     104               6,334
                                                ------------  ----------  ------  ------------------
  Total amortization expense after
    June 30, 2005...................            $     29,813  $   20,363  $1,590             $51,766
                                                ============  ==========  ======  ==================

</TABLE>







                                       14

<PAGE>


     The table below reflects the Company's  intangible  assets and  accumulated
amortization at June 30, 2004 and 2005.


<TABLE>
<CAPTION>

                                        JUNE 30, 2004                         JUNE 30, 2005
                            -----------------------------------    -----------------------------------
                               GROSS                        NET       GROSS                        NET
                            CARRYING     ACCUMULATED   CARRYING    CARRYING    ACCUMULATED    CARRYING
DOLLARS IN THOUSANDS          AMOUNT    AMORTIZATION     AMOUNT      AMOUNT   AMORTIZATION      AMOUNT
--------------------------  --------    ------------   --------      ------   ------------      ------
<S>                         <C>         <C>            <C>         <C>        <C>             <C>
Core Deposit Intangibles..  $ 53,530    $    (21,873)  $ 31,657    $ 67,237   $    (37,424)   $ 29,813
Rights-to-Expiration......    35,808         (10,769)    25,039      35,808        (15,445)     20,363
Other.....................        --             --          --       2,100           (510)      1,590
                            --------    ------------   --------    --------   ------------    --------
   Total..................  $ 89,338    $    (32,642)  $ 56,696    $105,145   $    (53,379)   $ 51,766
                            ========    ============   ========    ========   ============    ========

</TABLE>


NOTE 7--BUSINESS SEGMENTS

     In April 2005, the Company  announced several  organizational  changes that
affected its business segments. The Global Markets Group has been eliminated and
the activities of this group have been transferred.  Corporate Treasury which is
responsible for Asset-Liability Management (ALM) and the investment portfolio of
the Company,  is now included in "Other".  The trading of securities and foreign
exchange contracts,  as well as the responsibilities  for customer  accommodated
derivative  contracts,  are now included in the "Global Markets Division" of the
Community  Banking and Investment  Services Group.  The Company is now organized
around the target markets it serves and operates in three principal areas:

     o    The Community Banking and Investment  Services Group offers a range of
          banking  services,  primarily  to  individuals  and small  businesses,
          delivered  generally through a tri-state  (California,  Washington and
          Oregon)  network  of  branches  and  ATMs.   These  services   include
          mortgages, home equity lines of credit, consumer and commercial loans,
          deposit  services and cash  management as well as  fiduciary,  private
          banking,  investment and asset management services for individuals and
          institutions,   and  risk   management  and  insurance   products  for
          businesses and individuals.  At June 30, 2004 and 2005, this Group had
          $315.4 million and $326.2 million,  respectively, of goodwill assigned
          to its businesses.

     o    The Commercial  Financial  Services Group provides credit,  depository
          and cash  management  services to large  corporate  and  middle-market
          companies and numerous  specialty niches.  Services include commercial
          and project loans, real estate financing, asset-based financing, trade
          finance  and  letters  of credit,  lease  financing,  customized  cash
          management services and selected capital markets products. At June 30,
          2004, this Group had no goodwill  assigned to its businesses  compared
          to $124.5  million of goodwill  assigned to its businesses at June 30,
          2005.

     o    The  International  Banking  Group  primarily  provides  correspondent
          banking and  trade-finance  products  and  services  to  international
          financial  institutions.  The Group's revenue predominantly relates to
          foreign customers.

     The  information,  set forth in the tables on the following page,  reflects
selected  income  statement  and balance  sheet items by business  segment.  The
information  presented  does  not  necessarily  represent  the  business  units'
financial  condition and results of operations were they  independent  entities.
Unlike


                                       15

<PAGE>


                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)


NOTE 7--BUSINESS SEGMENTS (CONTINUED)

financial accounting,  there is no authoritative body of guidance for management
accounting  equivalent  to US  GAAP.  Consequently,  reported  results  are  not
necessarily comparable with those presented by other companies.  Included in the
table within total assets are the amounts of goodwill for each business  segment
as of June 30, 2004 and 2005.

     The  information  in these tables are derived from the internal  management
reporting  system used by management to measure the  performance of the business
segments  and the Company  overall.  The  management  reporting  system  assigns
balance  sheet and income  statement  items to each  business  segment  based on
internal management  accounting  policies.  Net interest income is determined by
the Company's  internal funds transfer  pricing system,  which assigns a cost of
funds or a credit  for  funds to  assets  or  liabilities  based on their  type,
maturity or repricing  characteristics.  Noninterest income and expense directly
attributable  to a business  segment  are  assigned  to that  business.  Certain
indirect costs, such as operations and technology expense,  are allocated to the
segments based on studies of billable unit costs for product or data processing.
Other indirect costs, such as corporate overhead,  are allocated to the business
segments  based on a  predetermined  percentage  of usage.  Under the  Company's
risk-adjusted return on capital (RAROC)  methodology,  credit expense is charged
to business  segments  based upon expected  losses  arising from credit risk. In
addition,  the attribution of economic  capital is related to unexpected  losses
arising from credit, market and operational risks.

     "Other" is comprised of certain parent company non-bank  subsidiaries,  the
elimination of the fully  taxable-equivalent  basis amount, the transfer pricing
center,  the amount of the  provision  for loan  losses  over/(under)  the RAROC
expected  loss for the period,  the  earnings  associated  with the  unallocated
equity  capital and  allowances  for credit  losses,  and the residual  costs of
support groups.  In addition,  "Other" includes the Pacific Rim Corporate Group,
which offers financial  products to Japanese-owned  subsidiaries  located in the
U.S. and  Corporate  Treasury,  which manages the  Company's  wholesale  funding
needs,  securities  portfolio,  interest rate and  liquidity  risk and the funds
transfer pricing system. Except as discussed above, none of the items in "Other"
are significant to the Company's business.












                                       16

<PAGE>


                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)


NOTE 7--BUSINESS SEGMENTS (CONTINUED)

     The business  units'  results for the prior  periods have been  restated to
reflect  changes in the  transfer  pricing  methodology  and the  organizational
changes that have occurred.

<TABLE>
<CAPTION>


                                       COMMUNITY BANKING
                                        AND INVESTMENT      COMMERCIAL FINANCIAL     INTERNATIONAL
                                        SERVICES GROUP         SERVICES GROUP        BANKING GROUP
                                       ------------------   --------------------   -----------------
                                               AS OF AND FOR THE THREE MONTHS ENDED JUNE 30,
                                       -------------------------------------------------------------
                                         2004      2005       2004        2005       2004     2005
-------------------------------------- --------  --------   --------    --------   -------   -------
<S>                                    <C>       <C>        <C>         <C>        <C>       <C>
RESULTS OF OPERATIONS (DOLLARS IN
  THOUSANDS):
Net interest income................... $179,360  $234,031   $162,147    $220,713   $ 8,946   $ 7,608
Noninterest income (expense)..........  131,089   134,993     72,638      75,898    22,261    18,319
Total revenue.........................  310,449   369,024    234,785     296,611    31,207    25,927
Noninterest expense...................  226,090   256,022    103,680     116,280    16,957    15,859
Credit expense (income)...............    7,847     7,681     26,480      21,374       645       370
Income before income tax expense......   76,512   105,321    104,625     158,957    13,605     9,698
Income tax expense....................   29,266    40,285     34,265      53,252     5,204     3,709
Net income............................ $ 47,246  $ 65,036   $ 70,360    $105,705   $ 8,401   $ 5,989
                                       --------  --------   --------    --------   -------   -------
TOTAL ASSETS, END OF PERIOD (dollars
  in millions):....................... $ 14,254  $ 16,798   $ 14,852    $ 18,975   $ 2,379   $ 1,992
                                       ========  ========   ========    ========   =======   =======

</TABLE>

<TABLE>
<CAPTION>

                                                                   UNIONBANCAL
                                             OTHER                 CORPORATION
                                       ------------------      --------------------
                                       AS OF AND FOR THE THREE MONTHS ENDED JUNE 30,
                                       --------------------------------------------
                                         2004      2005          2004        2005
-------------------------------------- --------  --------      --------    --------
<S>                                    <C>       <C>           <C>         <C>
RESULTS OF OPERATIONS (DOLLARS IN
  THOUSANDS):
Net interest income................... $ 49,405  $  1,504      $399,858    $463,856
Noninterest income (expense)..........  105,022    (7,860)      331,010     221,350
Total revenue.........................  154,427    (6,356)      730,868     685,206
Noninterest expense...................   29,675    21,029       376,402     409,190
Credit expense (income)............... (44,972)   (40,425)      (10,000)    (11,000)
Income before income tax expense......  169,724    13,040       364,466     287,016
Income tax expense....................   64,634     2,588       133,369      99,834
Net income............................ $105,090  $ 10,452      $231,097    $187,182
                                       --------  --------      --------    --------
TOTAL ASSETS, END OF PERIOD (dollars
  in millions):....................... $ 14,811  $ 13,413      $ 46,296    $ 51,178
                                       ========  ========      ========    ========

</TABLE>


                                       17

<PAGE>


                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)

NOTE 7--BUSINESS SEGMENTS (CONTINUED)

<TABLE>
<CAPTION>

                                       COMMUNITY BANKING
                                         AND INVESTMENT     COMMERCIAL FINANCIAL     INTERNATIONAL
                                         SERVICES GROUP         SERVICES GROUP       BANKING GROUP
                                       ------------------   --------------------   -----------------
                                                AS OF AND FOR THE SIX MONTHS ENDED JUNE 30,
                                       -------------------------------------------------------------
                                         2004      2005       2004        2005      2004      2005
-------------------------------------- --------  --------   --------    --------   -------   -------
<S>                                    <C>       <C>        <C>         <C>        <C>       <C>
RESULTS OF OPERATIONS (DOLLARS IN
  THOUSANDS):
Net interest income................... $355,928  $456,579   $319,636    $418,862   $16,521   $15,031
Noninterest income (expense)..........  249,254   269,146    142,266     140,811    40,450    35,977
Total revenue.........................  605,182   725,725    461,902     559,673    56,971    51,008
Noninterest expense...................  447,646   514,566    208,415     225,356    32,640    31,326
Credit expense (income)...............   15,684    16,639     57,706      45,042     1,249       806
Income before income tax expense......  141,852   194,520    195,781     289,275    23,082    18,876
Income tax expense....................   54,258    74,404     62,526      96,300     8,829     7,220
Net income............................ $ 87,594  $120,116   $133,255    $192,975   $14,253   $11,656
                                       --------  --------   --------    --------   -------   -------
TOTAL ASSETS, END OF PERIOD (dollars
  in millions):....................... $ 14,254  $ 16,798   $ 14,852    $ 18,975   $ 2,379   $ 1,992
                                       ========  ========   ========    ========   =======   =======

</TABLE>

<TABLE>
<CAPTION>

                                                                 UNIONBANCAL
                                             OTHER               CORPORATION
                                       ------------------   ----------------------
                                       AS OF AND FOR THE SIX MONTHS ENDED JUNE 30,
                                       -------------------------------------------
                                         2004      2005        2004        2005
-------------------------------------- --------  --------   ----------  ----------
<S>                                    <C>       <C>        <C>         <C>
RESULTS OF OPERATIONS (DOLLARS IN
  THOUSANDS):
Net interest income................... $108,194  $ 14,183   $  800,279  $  904,655
Noninterest income (expense)..........  110,245    (1,823)     542,215     444,111
Total revenue.........................  218,439    12,360    1,342,494   1,348,766
Noninterest expense...................   60,807    45,409      749,508     816,657
Credit expense (income)...............  (89,639)  (81,487)     (15,000)    (19,000)
Income before income tax expense......  247,271    48,438      607,986     551,109
Income tax expense....................   93,789     4,026      219,402     181,950
Net income............................ $153,482  $ 44,412   $  388,584  $  369,159
                                       --------  --------   ----------  ----------
TOTAL ASSETS, END OF PERIOD (dollars
  in millions):....................... $ 14,811  $ 13,413   $   46,296  $   51,178
                                       ========  ========   ==========  ==========

</TABLE>


NOTE 8--DERIVATIVE INSTRUMENTS AND OTHER FINANCIAL INSTRUMENTS USED FOR HEDGING

     Derivative  positions are integral  components of the Company's  designated
ALM  activities.  The  Company  uses  interest  rate  derivatives  to manage the
sensitivity of the Company'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, medium-term notes and subordinated debt.

     CASH FLOW HEDGES

     HEDGING STRATEGIES FOR VARIABLE RATE LOANS AND CERTIFICATES OF DEPOSIT

     The Company  engages in several types of cash flow hedging  strategies  for
which the hedged  transactions  are forecasted  future loan and deposit interest
receipt  and  payments,  and  the  hedged  risk  is  the  variability  in  those
receipts/payments  due to changes in the designated  benchmark rate,  e.g., U.S.
dollar


                                       18

<PAGE>


                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)


NOTE 8--DERIVATIVE  INSTRUMENTS AND OTHER FINANCIAL INSTRUMENTS USED FOR HEDGING
     (CONTINUED)

LIBOR. In these strategies,  the hedging  instruments are matched with groups of
variable  rate  loans or  deposits  such  that the  tenor of the  variable  rate
loans/deposits and that of the hedging instrument are aligned. Cash flow hedging
strategies include the utilization of purchased floor, cap, corridor options and
interest rate swaps.  At June 30, 2005, the weighted  average  remaining life of
the currently  active  (excluding  any forward  positions)  cash flow hedges was
approximately 1.2 years.

     The Company uses purchased  interest rate floors to hedge the variable cash
flows associated with 1-month to 6-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.

     The Company uses interest  rate floor  corridors to hedge the variable cash
flows associated with 1-month to 6-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.

     The Company uses  interest  rate  collars to hedge the variable  cash flows
associated  with  1-month to 6-month  LIBOR  indexed  loans.  Net payments to be
received under the collar  contract  offset the decline in loan interest  income
caused by the relevant  LIBOR index falling below the collar's floor 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.

     The  Company  uses  interest  rate swaps to hedge the  variable  cash flows
associated with 1-month to 6-month LIBOR indexed loans.  Payments to be received
(or paid) under the swap contract 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.

     The  Company  uses  purchased  interest  rate  caps to hedge  the  variable
interest  cash flows  associated  with the  forecasted  issuance and rollover of
short-term,   fixed  rate  certificates  of  deposit  (CDs).  In  these  hedging
relationships,  the Company hedges the LIBOR component of the CD rates, which is
1-month to 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.

     The Company uses  interest  rate cap  corridors to hedge the variable  cash
flows associated with the forecasted issuance and rollover of short-term,  fixed
rate CDs. In these hedging relationships, the Company hedges the LIBOR component
of the CD rates, either 1-month LIBOR, 3-month LIBOR, or 6-month LIBOR, based on
the  original  term to  maturity  of the CDs,  which  reflects  their  repricing
frequency.  Net payments to be received under the cap corridor  contract  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


                                       19

<PAGE>


                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)


NOTE 8--DERIVATIVE  INSTRUMENTS AND OTHER FINANCIAL INSTRUMENTS USED FOR HEDGING
     (CONTINUED)

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 the second  quarter of 2005,
the Company recognized a net gain of $0.1 million due to ineffectiveness,  which
is recognized in noninterest expense,  compared to a net loss of $0.3 million in
the second quarter of 2004.

     FAIR VALUE HEDGES

     HEDGING STRATEGY FOR "MARKETPATH" CERTIFICATES OF DEPOSIT

     The Company  engages in a hedging  strategy in which  interest  bearing CDs
issued to  customers,  which are tied to the changes in the  Standard and Poor's
500 index, are exchanged for a fixed rate of interest.  The Company accounts for
the  embedded  derivative  in the CDs at fair  value.  A total  return swap that
encompasses the value of a series of options that had  individually  hedged each
CD is valued at fair value and any ineffectiveness  resulting from the hedge and
the hedged item are recognized in noninterest expense.

     HEDGING  STRATEGY FOR  UNIONBANCAL  CORPORATION--JUNIOR  SUBORDINATED  DEBT
     PAYABLE TO SUBSIDIARY GRANTOR TRUST (TRUST NOTES)

     On  February  19,  2004,  the Company  terminated  its fair value hedge and
called its Trust Notes.  Prior to this date, the Company  engaged in an interest
rate  hedging  strategy in which an  interest  rate swap was  associated  with a
specific interest bearing liability,  UnionBanCal  Corporation's Trust Notes, in
order to convert the liability from a fixed rate to a floating rate  instrument.
This strategy mitigated the changes in fair value of the hedged liability caused
by changes in the designated  benchmark interest rate, U.S. dollar LIBOR. At the
termination  date, the Company  recognized a net gain of $1.6 million related to
hedge ineffectiveness.

     HEDGING STRATEGY FOR MEDIUM-TERM NOTES

     The  Company  engages in an  interest  rate  hedging  strategy  in which an
interest rate swap is associated with a specified  interest  bearing  liability,
UnionBanCal  Corporation's  five-year,  medium-term  debt issuance,  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, U.S. dollar LIBOR.

     The fair value hedging transaction for the medium-term notes was structured
at inception to mirror all of the  provisions of the  medium-term  notes,  which
allows the Company to assume that no ineffectiveness exists.

     HEDGING STRATEGY FOR SUBORDINATED DEBT

     The  Company  engages in an  interest  rate  hedging  strategy  in which an
interest rate swap is associated with a specified  interest  bearing  liability,
UnionBanCal  Corporation's  ten-year,  subordinated  debt issuance,  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, U.S. dollar LIBOR.


                                       20

<PAGE>


                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)


NOTE 8--DERIVATIVE  INSTRUMENTS AND OTHER FINANCIAL INSTRUMENTS USED FOR HEDGING
     (CONTINUED)

     The fair value hedging transaction for the subordinated debt was structured
at inception to mirror all of the  provisions of the  subordinated  debt,  which
allows the Company to assume that no ineffectiveness exists.

     OTHER

     The Company uses To-Be-Announced (TBA) contracts to fix the price and yield
of anticipated  purchases or sales of  mortgage-backed  securities  that will be
delivered at an agreed upon date.  This strategy  hedges the risk of variability
in the cash flows to be paid or received upon settlement of the TBA contract.

NOTE 9--GUARANTEES

     Standby and commercial letters of credit are conditional commitments issued
to guarantee the performance of a customer to a third party.  Standby letters of
credit  generally  are  contingent  upon the failure of the  customer to perform
according to the terms of the  underlying  contract with the third party,  while
commercial  letters of credit are issued  specifically to facilitate  foreign or
domestic trade  transactions.  The majority of these types of  commitments  have
terms of one year or less.  Collateral  may be  obtained  based on  management's
credit  assessment of the customer.  As of June 30, 2005, the Company's  maximum
exposure to loss for standby and  commercial  letters of credit was $3.2 billion
and $174.2  million,  respectively.  At June 30, 2005, the carrying value of the
Company's  standby  and  commercial  letters  of credit  totaled  $8.4  million.
Exposure to loss related to these  commitments  is covered by the  allowance for
off-balance  sheet  commitments.  Both of these  amounts  are  included in other
liabilities on the consolidated balance sheet.

     Principal  investments  include  direct  investments  in private and public
companies and indirect  investments in private equity funds.  The Company issues
commitments  to provide  equity and mezzanine  capital  financing to private and
public  companies  through either direct  investments  in specific  companies or
through   investment  funds  and   partnerships.   The  timing  of  future  cash
requirements to fund such  commitments is generally  dependent on the investment
cycle. This cycle, the period over which privately-held  companies are funded by
private equity investors and ultimately sold, merged, or taken public through an
initial  offering,  can vary based on overall  market  conditions as well as the
nature and type of industry in which the  companies  operate.  At June 30, 2005,
the Company had commitments to fund principal investments of $119.1 million.

     The  Company  has  contingent   consideration   agreements  that  guarantee
additional  payments to acquired insurance  agencies'  stockholders based on the
agencies'  future  performance in excess of established  revenue and/or earnings
before interest,  taxes,  depreciation and amortization (EBITDA) thresholds.  If
the insurance  agencies' future  performance  exceeds these thresholds  during a
three-year  period,  the Company will be liable to make payments to those former
stockholders.  As of June 30, 2005,  the Company had a maximum  exposure of $5.8
million for these agreements, the last of which expire in December 2006.

     The  Company is fund  manager for limited  liability  corporations  issuing
low-income  housing  credit (LIHC)  investments.  LIHC  investments  provide tax
benefits to investors in the form of tax deductions  from  operating  losses and
tax  credits.  To  facilitate  the sale of these LIHC  investments,  the Company
guarantees  the timely  completion  of projects  and  delivery  of tax  benefits
throughout the investment term.


                                       21

<PAGE>


                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)


NOTE 9--GUARANTEES (CONTINUED)

Guarantees  may  include a  minimum  rate of  return,  the  availability  of tax
credits,  and  operating  deficit  thresholds  over a ten-year  average  period.
Additionally,  the Company receives project completion and tax credit guarantees
from the limited liability corporations issuing the LIHC investments that reduce
the  Company's  ultimate  exposure to loss.  As of June 30, 2005,  the Company's
maximum  exposure  to loss under  these  guarantees  was  limited to a return of
investor capital and minimum  investment  yield, or $141.4 million.  The Company
maintains a reserve of $5.9 million for these guarantees.

     The Company has  guarantees  that obligate it to perform if its  affiliates
are unable to discharge their obligations.  These obligations  include guarantee
of commercial  paper  obligations and leveraged lease  transactions.  Guarantees
issued by the Bank for an affiliate's commercial paper program are done in order
to facilitate  their sale. As of June 30, 2005, the Bank had a maximum  exposure
to loss under the  commercial  paper  guarantees,  which have an average term of
less  than  one  year,   of  $1.1  billion.   The  Bank's   guarantee  is  fully
collateralized  by a pledged  deposit.  UnionBanCal  Corporation  guarantees its
subsidiaries' leveraged lease transactions,  which have terms ranging from 15 to
30 years.  Following the original  funding of the leveraged lease  transactions,
UnionBanCal  Corporation has no material obligation to be satisfied.  As of June
30, 2005,  UnionBanCal  Corporation had no material exposure to loss under these
guarantees.

     The Company conducts  securities  lending  transactions  for  institutional
customers  as  a  fully   disclosed   agent.   At  times,   securities   lending
indemnifications  are issued to guarantee that a security  lending customer will
be made whole in the event the borrower does not return the security  subject to
the lending  agreement and collateral  held is  insufficient to cover the market
value of the security. All lending transactions are collateralized, primarily by
cash. The amount of securities  lent with  indemnifications  was $2.0 billion at
June 30, 2005. The market value of the associated collateral was $2.1 billion at
June 30, 2005.
















                                       22

<PAGE>

                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)


NOTE 10--PENSION AND OTHER POSTRETIREMENT BENEFITS

     The following tables summarize the components of net periodic benefit costs
for the three and six months ended June 30, 2004 and 2005.

<TABLE>
<CAPTION>

                                            PENSION BENEFITS         OTHER BENEFITS
                                          --------------------    --------------------
                                          FOR THE THREE MONTHS    FOR THE THREE MONTHS
                                             ENDED JUNE 30,          ENDED JUNE 30,
                                          --------------------    --------------------
(DOLLARS IN THOUSANDS)                      2004        2005        2004        2005
----------------------------------------  --------    --------    -------      -------
<S>                                       <C>         <C>         <C>          <C>
COMPONENTS OF NET PERIODIC BENEFIT COST
Service cost............................  $  9,511    $ 11,373    $ 1,815      $ 1,553
Interest cost...........................    13,518      14,856      2,908        2,002
Expected return on plan assets..........   (20,778)    (24,028)    (2,370)      (2,576)
Amortization of prior service cost......       267         267        (24)         (24)
Amortization of transition amount.......        --          --        638          509
Recognized net actuarial loss...........     4,395       7,211      1,950          429
                                          --------    --------    -------      -------
Total net periodic benefit cost.........  $  6,913    $  9,679    $ 4,917      $ 1,893
                                          ========    ========    =======      =======

</TABLE>

<TABLE>
<CAPTION>

                                            PENSION BENEFITS         OTHER BENEFITS
                                          --------------------    --------------------
                                           FOR THE SIX MONTHS      FOR THE SIX MONTHS
                                              ENDED JUNE 30,         ENDED JUNE 30,
                                          --------------------    --------------------
(DOLLARS IN THOUSANDS)                      2004        2005        2004        2005
----------------------------------------  --------    --------    -------      -------
<S>                                       <C>         <C>         <C>          <C>
COMPONENTS OF NET PERIODIC BENEFIT COST
Service cost............................  $ 18,829    $ 22,765    $ 3,383      $ 3,102
Interest cost...........................    26,120      29,176      5,680        4,230
Expected return on plan assets..........   (41,565)    (47,933)    (4,467)      (5,175)
Amortization of prior service cost......       534         534        (48)         (48)
Amortization of transition amount.......        --          --      1,275        1,018
Recognized net actuarial loss...........     7,217      13,312      3,536        1,397
                                          --------    --------    -------      -------
Total net periodic benefit cost.........  $ 11,135    $ 17,854    $ 9,359      $ 4,524
                                          ========    ========    =======      =======

</TABLE>

     In 2004, the Company recorded a $6.1 million  reduction in employee benefit
expense associated with the remeasurement of postretirement benefits as a result
of the Medicare  Prescription  Drug,  Improvement and  Modernization Act of 2003
("The Act").  The reduction is attributable to a federal subsidy provided by The
Act to employers that sponsor  retiree health care plans with drug benefits that
are equivalent to those offered under Medicare Part D. The effect of the subsidy
on  the  measurement  of net  periodic  postretirement  benefit  cost  has  been
recognized since the effective date of The Act, July 1, 2004. As a result, there
was no impact recognized in the first half of 2004.

     At December 31, 2004, the Company  expected to make cash  contributions  of
$125  million to the Pension Plan and $17 million to the Health Plan for pension
and postretirement benefits,  respectively, in 2005. During the first six months
of 2005, the Company made those contributions.

NOTE 11--SUBSEQUENT EVENTS

     On July 27, 2005,  the  Company's  Board of Directors  declared a quarterly
cash dividend of $0.41 per share of common  stock.  The dividend will be paid on
October 7, 2005 to stockholders of record as of September 9, 2005.

     On July 28, 2005, the Company made an additional  $57 million  contribution
to the Pension Plan.














                                       23


<PAGE>


ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

     THIS REPORT INCLUDES FORWARD-LOOKING STATEMENTS, WHICH INCLUDE FORECASTS OF
OUR  FINANCIAL  RESULTS  AND  CONDITION,  EXPECTATIONS  FOR OUR  OPERATIONS  AND
BUSINESS, AND OUR ASSUMPTIONS FOR THOSE FORECASTS AND EXPECTATIONS.  DO NOT RELY
UNDULY ON FORWARD-LOOKING STATEMENTS.  ACTUAL RESULTS MIGHT DIFFER SIGNIFICANTLY
FROM OUR  FORECASTS AND  EXPECTATIONS.  PLEASE REFER TO "FACTORS THAT MAY AFFECT
FUTURE  RESULTS"  FOR A DISCUSSION  OF SOME  FACTORS  THAT MAY CAUSE  RESULTS TO
DIFFER.

     You should read the following  discussion and analysis of our  consolidated
financial  condition and results of our operations for the period ended June 30,
2005 in this  quarterly  report  on Form  10-Q  together  with our  Consolidated
Financial Statements and the Notes to Consolidated Financial Statements included
in our  Annual  Report  on Form  10-K  for the year  ended  December  31,  2004.
Averages, as presented in the following tables, are substantially all based upon
daily average balances.

INTRODUCTION

     We  are  a   California-based,   commercial   bank  holding   company  with
consolidated  assets of $51.2  billion at June 30, 2005.  At June 30, 2005,  The
Bank of  Tokyo-Mitsubishi,  Ltd., our majority  owner,  owned  approximately  61
percent of our outstanding common stock.

EXECUTIVE OVERVIEW

     We are  providing  you with an  overview  of what we  believe  are the most
significant  factors and  developments  that  impacted  our second  quarter 2005
results and that could impact our future results. We ask that you carefully read
the rest of this document for more detailed  information that will complete your
understanding of trends, events and uncertainties that impact us.

     Overall  credit  quality  continued its  improving  trend during the second
quarter 2005. Our nonaccrual  loan portfolio has reached a historical low of $66
million at June 30, 2005  compared to $157 million at December 31, 2004 and $178
million at June 30, 2004.  This decline in nonaccrual  loans  resulted from loan
payoffs, upgrades and a low level of new inflows. We reversed $15 million of our
allowances for credit losses (an $11 million  reversal related to loans and a $4
million  reversal for losses on  off-balance  sheet  commitments)  in the second
quarter  2005,  compared  with a reversal of $10  million in the second  quarter
2004.

     Net interest  income grew from $400 million for the three months ended June
30,  2004 to $464  million  for the three  months  ended June 30,  2005.  Our 16
percent  growth in net interest  income  reflects the impact of higher  interest
rates and increased  average  earning assets and noninterest  bearing  deposits,
offset by lower income from our derivative  hedges.  We believe that as interest
rates gradually rise and our commercial loan portfolio  grows,  our net interest
margin will be positively impacted throughout the remainder of 2005.

     Noninterest  income  declined in the second  quarter 2005 compared with the
second  quarter 2004.  Excluding the $93 million gain related to the sale of our
merchant card portfolio and a $9 million gain from the sale of a building in the
second quarter 2004, our noninterest  income declined by $8 million due to lower
service charges on our deposit accounts,  card processing fees and a $13 million
loss on sales of securities available for sale, offset by increases in trust and
investment management fees and merchant banking fees.

     Noninterest  expense  grew in the second  quarter  2005  compared  with the
second  quarter  2004,   primarily   from  the   investments  we  made  in  bank
acquisitions,  de novo  branches and  technology  in 2004. We believe that these
investments  will bring  opportunities  for growth in our business by increasing
our customer base and expanding the services we provide.


                                       24

<PAGE>


     In the second  quarter 2005, we continued our practice of returning  excess
capital to our  stockholders by repurchasing $89 million of our common shares in
the open  market and by  increasing  our  quarterly  cash  dividend to $0.41 per
share.

CRITICAL ACCOUNTING POLICIES

     UnionBanCal Corporation's consolidated financial statements are prepared in
accordance with accounting principles generally accepted in the United States of
America (US GAAP) and the general practices of the banking industry.

     The  financial  information  contained  within  our  statements  is,  to  a
significant extent,  financial information that is based on approximate measures
of the financial  effects of transactions and events that have already occurred.
A variety of factors  could  affect the ultimate  value that is obtained  either
when earning income, recognizing an expense,  recovering an asset or relieving a
liability.  In many instances, we use a discount factor to determine the present
value of assets and liabilities.  A change in the discount factor could increase
or decrease the values of those assets and  liabilities  and such a change would
result in either a beneficial or adverse impact to our financial results. We use
historical  loss  factors,  adjusted for current  conditions,  to determine  the
inherent loss that may be present in our loan and lease portfolio. Actual losses
could differ  significantly  from the loss factors that we use. Other  estimates
that we use are employee turnover factors for pension purposes,  residual values
in our leasing portfolio, fair value of our derivatives and securities, expected
useful lives of our depreciable  assets and assumptions  regarding our effective
income  tax  rates.  We enter  into  derivative  contracts  to  accommodate  our
customers and for our own risk management purposes. The derivative contracts are
generally  foreign  exchange,  interest  rate  swap  and  interest  rate  option
contracts,  and  energy-related  derivatives to accommodate our customers in the
oil and gas  industry.  We value these  contracts  at fair value,  using  either
readily  available,  market  quoted  prices  or  from  information  that  can be
extrapolated  to approximate a market price.  We have not  historically  entered
into  derivative  contracts for our customers or for ourselves,  which relate to
credit,  non-energy  commodity or weather-related  indices. We are subject to US
GAAP that may change from one previously  acceptable  method to another  method.
Although the  economics  of our  transactions  would be the same,  the timing of
events that would impact our  transactions  could change.  Our most  significant
estimates  are approved by our Chief  Executive  Officer  (CEO) Forum,  which is
comprised of our most senior  executives.  At each financial  reporting  period,
these  estimates  are then  reviewed  by the  Audit  Committee  of our  Board of
Directors.

     Understanding  our accounting  policies is fundamental to understanding our
consolidated   financial  condition  and  consolidated  results  of  operations.
Accordingly,  except for an update to our pension obligations  accounting policy
below, our significant  accounting policies are discussed in detail in Note 1 in
the "Notes to  Consolidated  Financial  Statements" in our 2004 Annual Report on
Form 10-K filed with the Securities and Exchange Commission.

     In addition to information  provided in our "Critical  Accounting Policies"
in our 2004 Annual  Report,  we are  providing the  following  information  with
respect to our discount rate for  determining  our  obligations  for pension and
other post-retirement  benefits. The discount rate assumed in measuring the plan
obligations  is determined  by selecting  high quality  investments  rated Aa or
higher by a recognized rating agency corresponding to each year's future benefit
payments for the next 30 years.  The discount  rate is  calculated  based on the
weighted average  investment yields as of December 31 and rounded to the nearest
0.25  percent.  The reduction in the discount rate from 6.25 percent at December
31,  2003 to 5.75  percent at  December  31,  2004,  reported in our 2004 Annual
Report, reflects the annual evaluation of our discount rate assumptions.




                                       25

<PAGE>


FINANCIAL PERFORMANCE

SUMMARY OF FINANCIAL PERFORMANCE

<TABLE>
<CAPTION>

                                      FOR THE THREE                                  FOR THE SIX
                                         MONTHS         INCREASE (DECREASE)             MONTHS          INCREASE (DECREASE)
                                      ENDED JUNE 30,     2005 VERSUS 2004            ENDED JUNE 30,      2005 VERSUS 2004
                                   -------------------  -------------------    -----------------------  ------------------
(DOLLARS IN THOUSANDS)               2004       2005      AMOUNT    PERCENT       2004         2005      AMOUNT    PERCENT
---------------------------------- --------   --------  ---------   -------    ----------   ----------  --------   -------
<S>                                <C>        <C>       <C>            <C>     <C>          <C>         <C>           <C>
RESULTS OF OPERATIONS
Net interest income(1)...........  $399,858   $463,856  $  63,998      16.0%   $  800,279   $  904,655  $104,376      13.0%
Noninterest income
  Service charges on deposit
    accounts....................     90,031     80,757     (9,274)    (10.3)      171,127      161,212    (9,915)     (5.8)
  Trust and investment management
    fees........................     36,788     41,590      4,802      13.1        72,610       83,553    10,943      15.1
  Merchant banking fees.........      7,714     18,114     10,400        nm        15,181       24,380     9,199      60.6
  Card processing fees, net.....     15,456      6,464     (8,992)    (58.2)       24,248       12,071   (12,177)    (50.2)
  Securities gains (losses), net         (4)   (13,313)   (13,309)       nm         1,618      (12,969)  (14,587)       nm
  Gain on private capital
    investments, net............      4,017      5,261      1,244      31.0         7,331       13,196     5,865      80.0
  Gain on sale of merchant card
    portfolio...................     93,000         --    (93,000)       nm        93,000           --   (93,000)       nm
  Other noninterest income......     84,008     82,477     (1,531)     (1.8)      157,100      162,668     5,568       3.5
                                   --------   --------  ---------              ----------   ----------  --------
Total noninterest income.........   331,010    221,350   (109,660)    (33.1)      542,215      444,111   (98,104)    (18.1)
Total revenue....................   730,868    685,206    (45,662)     (6.2)    1,342,494    1,348,766     6,272       0.5
Reversal of allowance for loan
  losses(2).....................    (10,000)   (11,000)    (1,000)     10.0       (15,000)     (19,000)   (4,000)     26.7
Noninterest expense
  Salaries and employee benefits    217,597    241,653     24,056      11.1       437,020      481,133    44,113      10.1
  Net occupancy.................     32,173     34,681      2,508       7.8        63,755       68,206     4,451       7.0
  Outside services..............     17,406     27,320      9,914      57.0        33,865       49,216    15,351      45.3
  Professional services.........     10,290     20,682     10,392     101.0        21,593       34,392    12,799      59.3
  Software......................     12,908     15,617      2,709      21.0        25,903       30,245     4,342      16.8
  Foreclosed asset expense
    (income)....................         17     (2,577)    (2,594)       nm           536       (2,171)   (2,707)       nm
  Reversal of allowance for
    losses on off-balance sheet
    commitments(2)..............         --     (4,000)    (4,000)       nm            --       (1,000)   (1,000)       nm
  Other noninterest expense.....     86,011     75,814    (10,197)    (11.9)      166,836      156,636   (10,200)     (6.1)
                                   --------   --------  ---------              ----------   ----------  --------
Total noninterest expense........   376,402    409,190     32,788       8.7       749,508      816,657    67,149       9.0
Income before income tax.........   364,466    287,016    (77,450)    (21.3)      607,986      551,109   (56,877)     (9.4)
Income tax.......................   133,369     99,834    (33,535)    (25.1)      219,402      181,950   (37,452)    (17.1)
                                   --------   --------  ---------              ----------   ----------  --------
Net income.......................  $231,097   $187,182  $ (43,915)    (19.0)%  $  388,584   $  369,159  $(19,425)     (5.0)%
                                   ========   ========  =========              ==========   ==========  ========
---------------------
<FN>

(1)  Net  interest  income does not include any  adjustments  for fully  taxable
     equivalence.

(2)  Beginning  in the  quarter  ended  March 31,  2005,  the net  change in the
     allowance  for  losses on  off-balance  sheet  commitments  was  recognized
     separately from the change in the allowance for loan losses.  Prior periods
     have not been restated.

nm = not meaningful

</FN>
</TABLE>


     THE  PRIMARY  CONTRIBUTORS  TO OUR  FINANCIAL  PERFORMANCE  FOR THE  SECOND
     QUARTER OF 2005 COMPARED TO THE SECOND QUARTER OF 2004 ARE PRESENTED BELOW.

     o    The reversal of our allowance for loan losses in the second quarter of
          2005  is  primarily  attributable  to  the  improvement  in  the  loan
          portfolio and to the net recoveries during the quarter. Credit quality
          continued to improve in our commercial loan portfolio evidenced by the
          significant reductions in nonperforming assets. However, this trend is
          balanced by increasing  uncertainty  in the economic  outlook  coupled
          with  indications  that the  improvement  in credit  quality  could be
          reaching its peak.  (See our discussion  under  "Allowances for Credit
          Losses.")

     o    Our net interest  income was favorably  influenced  by higher  earning
          asset  volumes  (including  higher volume for  residential  mortgages,
          commercial loans and commercial  mortgages),  higher average


                                       26

<PAGE>


          yields on our earning  assets,  strong  deposit  growth  (including an
          attractive  mix of  average  noninterest  bearing  deposits  to  total
          deposits) and higher interest  recoveries.  Offsetting  these positive
          influences  to our net  interest  margin were higher rates on interest
          bearing  liabilities and lower hedge income (See our discussion  under
          "Net Interest Income.")

     o    The decrease in our noninterest income was due to several factors:

          o    In the second  quarter 2004, we sold our merchant card  portfolio
               to NOVA Information Systems (NOVA). In addition,  card processing
               fees,  net,  decreased  in the  current  year as a result of this
               sale;

          o    In the second quarter 2005, service charges on deposits decreased
               primarily due to lower account  analysis  fees,  stemming from an
               increase  in the  earnings  credit  rate  on  commercial  deposit
               balances;

          o    In the  second  quarter  2005,  we  sold  $475  million  of  U.S.
               government  agency  securities for a loss of approximately  $13.3
               million; partly offset by

          o    Higher trust and  investment  management  fees  primarily  due to
               continued strong sales,  solid organic growth and the acquisition
               of  the  business   portfolio  of  CNA  Trust  Company   (renamed
               TruSource)  and the  corporate  trust  business  of the BTM Trust
               Company,  New York.  Managed assets  increased by approximately 6
               percent and  non-managed  assets  increased by  approximately  35
               percent from the second  quarter 2004 to the second quarter 2005.
               Total assets under  administration  increased by approximately 32
               percent, to $209.8 billion, for the same period; and

          o    Higher  merchant  banking  fees  due to an  increased  number  of
               completed  syndication  deals in the current quarter  compared to
               the prior year quarter.

     o    Our higher noninterest expense was due to several factors:

          o    Salaries and employee  benefits  increased  primarily as a result
               of:

               o    acquisitions  and new branch  openings,  which accounted for
                    approximately 27 percent of the increase in our salaries and
                    other compensation;

               o    higher  performance-related   incentive  expense  from  goal
                    achievements and the issuance of higher levels of restricted
                    stock in the second quarter of 2005;

               o    annual merit increases; and

               o    higher employee benefits expense mainly due to the impact of
                    the lower  discount  rate we used to  calculate  our  future
                    pension and other  postretirement  liabilities (reduced from
                    6.25  percent  at  December  31,  2003  to 5.75  percent  at
                    December 31, 2004);

          o    Net occupancy  expense  increased mainly from  acquisitions,  new
               branch  openings,  the payment of a lease  termination fee in the
               second quarter of 2004 and the impact of lower rental income from
               non-bank tenants due to bank employee occupancy as we migrate our
               operations into fewer downtown San Francisco locations;

          o    Outside services  expense  increased mainly as a result of higher
               vendor  billings  stemming from a higher  earnings credit rate in
               the second quarter of 2005 primarily  related to title and escrow
               balances;

          o    Professional  services expenses increased mainly as a result of a
               $7.4 million increase in compliance-related expenses;

          o    Software   expense   increased   mainly  from  the  purchase  and
               development of software to support key technology initiatives;


                                       27

<PAGE>


          o    Foreclosed  asset  income  in the  second  quarter  of  2005  was
               primarily  due to a gain on the sale of a  foreclosed  commercial
               property;

          o    Provision for losses on off-balance sheet commitments,  which was
               previously included in the provision for loan losses, was reduced
               due  to  improving  credit  quality,   which  favorably  impacted
               noninterest expense in the second quarter of 2005; and

          o    Other  noninterest  expense  declined mainly due to lower reserve
               expenses    for    litigation,    partly    offset    by   higher
               acquisition-related    expenses,    including   amortization   of
               intangibles.

     THE PRIMARY  CONTRIBUTORS  TO OUR FINANCIAL  PERFORMANCE  FOR THE FIRST SIX
     MONTHS  OF 2005  COMPARED  TO THE FIRST  SIX  MONTHS OF 2004 ARE  PRESENTED
     BELOW.

     o    The reversal of our  allowance for loan losses in the first six months
          of 2005 is  primarily  attributable  to improving  credit  quality and
          year-to-date  net recoveries.  Credit quality  continued to improve in
          our commercial loan portfolio evidenced by reductions in nonperforming
          assets.  However, this trend is balanced by increasing  uncertainty in
          the economic  outlook coupled with indications that the improvement in
          credit quality could be reaching its peak.  (See our discussion  under
          "Allowances for Credit Losses.")

     o    Our net interest  income was favorably  influenced  by higher  earning
          asset  volumes  (including  a  higher  mix of  residential  mortgages,
          commercial loans, and commercial mortgages),  higher average yields on
          our earning assets and strong deposit growth  (including an attractive
          mix of  average  noninterest  bearing  deposits  to  total  deposits).
          Offsetting  these positive  influences to our net interest margin were
          higher rates on interest  bearing  liabilities  and lower hedge income
          (See our discussion under "Net Interest Income.")

     o    The decrease in our  noninterest  income was  attributable  to several
          factors:

          o    In the second  quarter 2004, we sold our merchant card  portfolio
               to NOVA. In addition, card processing fees, net, decreased in the
               current year as result of this sale;

          o    In the first six  months of 2005,  service  charges  on  deposits
               decreased  primarily due to lower account analysis fees, stemming
               from an  increase  in the  earnings  credit  rate  on  commercial
               deposit balances;

          o    In the  second  quarter  2005,  we  sold  $475  million  of  U.S.
               government  agency  securities for a loss of approximately  $13.3
               million; partly offset by

          o    Trust and investment management fees increased from the first six
               months  2004  primarily  due to  continued  strong  sales,  solid
               organic growth and the  acquisition of the business  portfolio of
               CNA Trust Company  (renamed  TruSource)  and the corporate  trust
               business of the BTM Trust Company, New York;

          o    Higher merchant banking fees  attributable to an increased number
               of completed  syndication  deals in the current year  compared to
               the prior year;

          o    Higher  gains on the sales and capital  distributions  on private
               capital investments compared to the prior year.

     o    Our higher noninterest expense was attributable to several factors:

          o    Salaries and employee  benefits  increased  primarily as a result
               of:

               o    acquisitions  and new branch  openings,  which accounted for
                    approximately 24 percent of the increase in our salaries and
                    other compensation;


                                       28

<PAGE>



               o    higher  performance-related   incentive  expense  from  goal
                    achievements and the amortization of restricted stock in the
                    second quarter of 2005;

               o    annual merit increases; and

               o    higher employee benefits expense mainly  attributable to the
                    impact of the lower  discount  rate we used to calculate our
                    future pension and other postretirement liabilities (reduced
                    from 6.25  percent at December  31, 2003 to 5.75  percent at
                    December 31, 2004) and a $3.2  million  reclassification  of
                    COLI income to other noninterest income (previously reported
                    as employee benefits expense in the prior year);

          o    Net occupancy  expense  increased mainly from  acquisitions,  new
               branch  openings,  the payment of a lease  termination fee in the
               second quarter of 2004 and the impact of lower rental income from
               non-bank tenants due to bank employee occupancy as we migrate our
               operations into fewer downtown San Francisco locations;

          o    Outside  services  expense  increased  primarily  as a result  of
               higher vendor  billings  stemming from a higher  earnings  credit
               rate in the first six months of 2005  primarily  related to title
               and escrow balances;

          o    Professional  services  expenses  increased  mainly due to a $9.3
               million increase in compliance-related expenses;

          o    Software   expense   increased   mainly  from  the  purchase  and
               development of software to support key technology initiatives;

          o    Foreclosed  asset  income  in the  second  quarter  of  2005  was
               primarily  attributable  to a gain on the  sale  of a  foreclosed
               commercial property; and

          o    Other noninterest expense declined primarily as a result of lower
               reserve expenses for litigation, partly offset by higher expenses
               related  to  the  Jackson  Federal  Bank  acquisition,  including
               amortization of intangibles.








                                       29

<PAGE>


NET INTEREST INCOME

     The following  table shows the major  components of net interest income and
net interest margin.

<TABLE>
<CAPTION>

                                                 FOR THE THREE MONTHS ENDED
                             ------------------------------------------------------------------         INCREASE (DECREASE) IN
                                      JUNE 30, 2004                      JUNE 30, 2005          -----------------------------------
                             --------------------------------  --------------------------------       AVERAGE           INCOME/
                                         INTEREST   AVERAGE                INTEREST   AVERAGE         BALANCE          EXPENSE(1)
                               AVERAGE    INCOME/    YIELD/      AVERAGE    INCOME/    YIELD/   ------------------ ----------------
(DOLLARS IN THOUSANDS)         BALANCE   EXPENSE(1) RATE(1)(2)   BALANCE   EXPENSE(1) RATE(1)(2)  AMOUNT   PERCENT  AMOUNT  PERCENT
---------------------------- ----------- ---------  ---------  ----------- ---------  --------- ---------- ------- -------- -------
<S>                          <C>         <C>           <C>     <C>         <C>           <C>    <C>          <C>   <C>       <C>
ASSETS
Loans:(3)
   Domestic................. $24,967,825 $ 319,829     5.14%   $30,412,677 $ 436,339     5.75%  $5,444,852   21.8% $116,510  36.4%
   Foreign(4)...............   1,870,797     8,818     1.90      1,811,314    15,803     3.50      (59,483)  (3.2)    6,985  79.2
Securities--taxable.........  11,696,096   107,146     3.66     10,964,803   101,672     3.71     (731,293)  (6.3)   (5,474) (5.1)
Securities--tax-exempt......      69,654     1,424     8.18         66,207     1,347     8.14       (3,447)  (4.9)      (77) (5.4)
Interest bearing deposits
  in banks..................     280,892     1,121     1.61        275,472     1,892     2.75       (5,420)  (1.9)      771  68.8
Federal funds sold and
  securities purchased
  under resale agreements...   1,143,901     2,928     1.03        696,177     5,256     3.03     (447,724) (39.1)    2,328  79.5
Trading account assets......     321,851       883     1.10        256,183     1,049     1.64      (65,668) (20.4)      166  18.8
                             ----------- ---------             ----------- ---------            ----------         --------
    Total earning assets....  40,351,016   442,149     4.40     44,482,833   563,358     5.07    4,131,817   10.2   121,209  27.4
                                         ---------                         ---------                               --------
Allowance for loan
  losses(5).................    (525,435)                         (402,207)                        123,228  (23.5)
Cash and due from banks.....   2,233,586                         2,404,587                         171,001    7.7
Premises and equipment, net.     514,122                           524,941                          10,819    2.1
Other assets................   2,038,062                         2,455,080                         417,018   20.5
                             -----------                       -----------                      ----------
    Total assets............ $44,611,351                       $49,465,234                      $4,853,883   10.9%
                             ===========                       ===========                      ==========
LIABILITIES
Domestic deposits:
  Interest bearing.......... $11,498,694    16,198     0.57    $12,462,267    32,055     1.03   $  963,573    8.4%   15,857  97.9
  Savings and consumer time.   4,225,435     8,540     0.81      4,704,180    14,132     1.20      478,745   11.3     5,592  65.5
  Large time................   2,298,403     7,385     1.29      3,029,992    18,605     2.46      731,589   31.8    11,220    nm
Foreign deposits(4).........   1,476,095     2,761     0.75      1,193,958     8,154     2.74     (282,137) (19.1)    5,393    nm
                             ----------- ---------             ----------- ---------            ----------         --------
    Total interest bearing
      deposits..............  19,498,627    34,884     0.72     21,390,397    72,946     1.37    1,891,770    9.7    38,062    nm
                             ----------- ---------             ----------- ---------            ----------         --------
Federal funds purchased
  and securities sold
  under repurchase
  agreements................     344,416       552     0.64      1,160,373     8,217     2.84      815,957     nm     7,665    nm
Commercial paper............     517,333     1,051     0.82      1,158,630     7,807     2.70      641,297     nm     6,756    nm
Other borrowed funds........     176,449     1,178     2.69        197,918     1,817     3.68       21,469   12.2       639  54.2
Medium and long-term debt...     819,595     3,693     1.81        799,514     7,459     3.74      (20,081)  (2.5)    3,766    nm
Trust notes.................      16,119       130     3.23         15,619       238     6.10         (500)  (3.1)      108  83.1
                             ----------- ---------             ----------- ---------            ----------         --------
    Total borrowed funds....   1,873,912     6,604     1.42      3,332,054    25,538     3.07    1,458,142   77.8    18,934    nm
                             ----------- ---------             ----------- ---------            ----------         --------
    Total interest bearing
      liabilities...........  21,372,539    41,488     0.78     24,722,451    98,484     1.60    3,349,912   15.7    56,996    nm
                                         ---------                         ---------                               --------
Noninterest bearing deposits  18,311,421                        19,332,936                       1,021,515    5.6
Other liabilities(5)........     993,603                         1,264,697                         271,094   27.3
                             -----------                       -----------                      ----------
    Total liabilities.......  40,677,563                        45,320,084                       4,642,521   11.4
STOCKHOLDERS' EQUITY
Common equity...............   3,933,788                         4,145,150                         211,362    5.4
                             -----------                       -----------                      ----------
    Total stockholders'
      equity................   3,933,788                         4,145,150                         211,362    5.4
                             -----------                       -----------                      ----------
    Total liabilities and
      stockholders' equity.. $44,611,351                       $49,465,234                      $4,853,883   10.9%
                             ===========                       ===========                      ==========
Net interest income/margin
  (taxable-equivalent basis)               400,661     3.98%                 464,874     4.18%                       64,213  16.0
Less: taxable-equivalent
      adjustment............                   803                             1,018                                    215  26.8
                                         ---------                         ---------                               --------
        Net interest income.             $ 399,858                         $ 463,856                               $ 63,998  16.0%
                                         =========                         =========                               ========
----------------
<FN>

(1)  Yields and  interest  income are  presented on a  taxable-equivalent  basis
     using the federal statutory tax rate of 35 percent.
(2)  Annualized.
(3)  Average balances on loans outstanding include all nonperforming  loans. The
     amortized  portion of net loan  origination  fees  (costs) is  included  in
     interest income on loans, representing an adjustment to the yield.
(4)  Foreign  loans and  deposits  are those loans and  deposits  originated  in
     foreign branches.
(5)  The average  allowance  for losses on  off-balance  sheet  commitments  was
     included in other liabilities for the quarter ended June 30, 2005.  Periods
     prior to December 31, 2004 have not been restated.

nm--not meaningful
</FN>
</TABLE>

                                       30


<PAGE>

<TABLE>
<CAPTION>


                                                 FOR THE SIX MONTHS ENDED
                             ------------------------------------------------------------------         INCREASE (DECREASE) IN
                                      JUNE 30, 2004                      JUNE 30, 2005          -----------------------------------
                             --------------------------------  --------------------------------       AVERAGE           INCOME/
                                         INTEREST   AVERAGE                INTEREST   AVERAGE         BALANCE          EXPENSE(1)
                               AVERAGE    INCOME/    YIELD/      AVERAGE    INCOME/    YIELD/   ------------------ ----------------
(DOLLARS IN THOUSANDS)         BALANCE   EXPENSE(1) RATE(1)(2)   BALANCE   EXPENSE(1) RATE(1)(2)  AMOUNT   PERCENT  AMOUNT  PERCENT
---------------------------- ----------- ---------  ---------  ----------- ---------  --------- ---------- ------- -------- -------
<S>                          <C>         <C>           <C>     <C>         <C>           <C>    <C>         <C>    <C>       <C>
ASSETS
Loans:(3)
   Domestic................. $24,750,113 $ 647,762     5.26%   $29,969,569 $ 838,966     5.63%  $5,219,456  21.1%  $191,204  29.5%
   Foreign(4)...............   1,740,126    16,496     1.91      1,796,361    29,436     3.30       56,235   3.2     12,940  78.4
Securities--taxable.........  11,546,375   212,139     3.67     11,043,518   201,611     3.65     (502,857) (4.4)   (10,528) (5.0)
Securities--tax-exempt......      67,733     2,759     8.15         66,673     2,672     8.02       (1,060) (1.6)       (87) (3.2)
Interest bearing deposits
  in banks..................     244,373     2,029     1.67        317,204     3,994     2.54       72,831  29.8      1,965  96.8
Federal funds sold and
  securities purchased
  under resale agreements...     965,448     4,887     1.02        537,615     7,629     2.86     (427,833)(44.3)     2,742  56.1
Trading account assets......     299,454     1,478     0.99        243,999     1,957     1.62      (55,455)(18.5)       479  32.4
                             ----------- ---------             ----------- ---------            ----------         --------
    Total earning assets....  39,613,622   887,550     4.50     43,974,939 1,086,265     4.96    4,361,317  11.0    198,715  22.4
                                         ---------                         ---------                               --------
Allowance for loan losses(5)    (529,803)                         (406,798)                        123,005 (23.2)
Cash and due from banks.....   2,254,820                         2,349,782                          94,962   4.2
Premises and equipment, net.     517,042                           526,528                           9,486   1.8
Other assets................   1,975,585                         2,430,310                         454,725  23.0
                             -----------                       -----------                      ----------
      Total assets.......... $43,831,266                       $48,874,761                      $5,043,495  11.5%
                             ===========                       ===========                      ==========
LIABILITIES
Domestic deposits:
  Interest bearing.......... $11,444,746    32,755     0.58    $12,359,316    57,523     0.94   $  914,570   8.0%    24,768  75.6
  Savings and consumer time.   4,181,065    17,258     0.83      4,741,366    27,180     1.16      560,301  13.4      9,922  57.5
  Large time................   2,365,502    15,720     1.34      2,898,489    34,652     2.41      532,987  22.5     18,932    nm
Foreign deposits(4).........   1,351,457     4,893     0.73      1,184,439    14,330     2.44     (167,018)(12.4)     9,437    nm
                             ----------- ---------             ----------- ---------            ----------         --------
    Total interest bearing
      deposits..............  19,342,770    70,626     0.73     21,183,610   133,685     1.27    1,840,840   9.5     63,059  89.3
                             ----------- ---------             ----------- ---------            ----------         --------
Federal funds purchased and
  securities sold under
  repurchase agreements.....     369,941     1,233     0.67      1,219,788    15,672     2.59      849,847    nm     14,439    nm
Commercial paper............     530,093     2,186     0.83      1,012,855    12,367     2.46      482,762  91.1     10,181    nm
Other borrowed funds........     182,139     2,478     2.74        189,278     3,346     3.56        7,139   3.9        868  35.0
Medium and long-term debt...     812,829     6,832     1.69        804,154    13,991     3.51       (8,675) (1.1)     7,159    nm
Trust notes.................     109,571     2,311     4.22         15,676       476     6.08      (93,895)(85.7)    (1,835)(79.4)
                             ----------- ---------             ----------- ---------            ----------         --------
    Total borrowed funds....   2,004,573    15,040     1.51      3,241,751    45,852     2.85    1,237,178  61.7     30,812    nm
                             ----------- ---------             ----------- ---------            ----------         --------
    Total interest bearing
      liabilities...........  21,347,343    85,666     0.81     24,425,361   179,537     1.48    3,078,018  14.4     93,871    nm
                                         ---------                         ---------                               --------
Noninterest bearing deposits  17,532,017                        19,015,386                       1,483,369   8.5
Other liabilities(5)........   1,010,051                         1,257,290                         247,239  24.5
                             -----------                       -----------                      ----------
      Total liabilities.....  39,889,411                        44,698,037                       4,808,626  12.1
STOCKHOLDERS' EQUITY
Common equity...............   3,941,855                         4,176,724                         234,869   6.0
                             -----------                       -----------                      ----------
      Total stockholders'
        equity..............   3,941,855                         4,176,724                         234,869   6.0
                             -----------                       -----------                      ----------
      Total liabilities and
        stockholders' equity $43,831,266                       $48,874,761                      $5,043,495  11.5%
                             ===========                       ===========                      ==========
Net interest income/margin
  (taxable-equivalent basis)               801,884     4.07%                 906,728     4.14%                      104,844  13.1
Less: taxable-equivalent
      adjustment............                 1,605                             2,073                                    468  29.2
                                         ---------                         ---------                               --------
      Net interest income...             $ 800,279                         $ 904,655                               $104,376  13.0%
                                         =========                         =========                               ========
--------------
<FN>

(1)  Yields and  interest  income are  presented on a  taxable-equivalent  basis
     using the federal statutory tax rate of 35 percent.
(2)  Annualized.
(3)  Average balances on loans outstanding include all nonperforming  loans. The
     amortized  portion of net loan  origination  fees  (costs) is  included  in
     interest income on loans, representing an adjustment to the yield.
(4)  Foreign  loans and  deposits  are those loans and  deposits  originated  in
     foreign branches.
(5)  The average  allowance  for losses on  off-balance  sheet  commitments  was
     included  in other  liabilities  for the six months  ended  June 30,  2005.
     Periods prior to December 31, 2004 have not been restated.

nm--not meaningful
</FN>
</TABLE>

                                       31

<PAGE>



     Net interest  income in the second  quarter 2005,  on a  taxable-equivalent
basis,  increased 16 percent,  from the second  quarter  2004.  Our results were
primarily attributable to the following:

     o    The growth in average earning assets was primarily  attributable to an
          increase in average  loans.  The increase in average loans was largely
          due to a $2.6 billion  increase in average  residential  mortgages,  a
          $1.3 billion  increase in average  commercial loans and a $1.1 billion
          increase in average commercial mortgages;

     o    Deposit  growth  contributed  favorably to net interest  margin in the
          second quarter 2005. Average  noninterest bearing deposits were higher
          in the second  quarter  2005,  compared  to the second  quarter  2004,
          mainly  attributable  to  higher  average  business  demand  deposits,
          despite a slight decline in demand  deposits from our title and escrow
          clients and higher consumer demand deposit growth;

     o    Yields on our earning assets were favorably impacted by the increasing
          interest rate environment and higher cash basis recoveries,  resulting
          in a higher  average  yield  of 67 basis  points  on  average  earning
          assets, despite being negatively impacted by lower hedge income, which
          decreased by $18.7 million; and

     o    In the second  quarter  2005,  we continued  to take  advantage of our
          ability  to  attract  lower  cost of funds  interest-bearing  core and
          noninterest-bearing  deposit balances, which represented approximately
          47.5 percent and 48.4 percent of total deposits, in the second quarter
          2005 and 2004,  respectively.  However,  our cost of funds on interest
          bearing  liabilities  was negatively  impacted by the increasing  rate
          environment,  resulting in a higher  average cost of  interest-bearing
          liabilities  of 82 basis points,  which  included  lower hedge income,
          which decreased by $0.7 million.

     As a result of these changes, our net interest margin increased by 20 basis
points.

     We use derivatives to hedge expected  changes in the yields on our variable
rate loans and term certificates of deposit (CDs), and to convert our long-term,
fixed-rate  borrowings  to floating  rate.  Throughout  2005,  these  derivative
positions  will  provide  less net  interest  income than in 2004,  as positions
mature and, to a lesser extent, as interest rates rise.  However,  we expect the
declines  in hedge  income to be  partially  offset by  increased  yields on the
underlying  variable rate loans.  For the quarters ended June 30, 2004 and 2005,
we had hedge income of $26.8 million and $7.4 million, respectively.

     Net interest  income in the first six months 2005, on a  taxable-equivalent
basis,  increased 13 percent,  from the first six months 2004.  Our results were
primarily attributable to the following:

     o    The growth in average earning assets was primarily  attributable to an
          increase in average  loans.  The increase in average loans was largely
          due to a $2.5 billion  increase in average  residential  mortgages,  a
          $1.3 billion  increase in average  commercial loans and a $1.1 billion
          increase in average commercial mortgages;

     o    Deposit  growth  contributed  favorably to net interest  margin in the
          first six months  2005.  Average  noninterest  bearing  deposits  were
          higher in the first six months 2005,  compared to the first six months
          2004, mainly  attributable to higher average business demand deposits,
          including  demand  deposits  from our title and escrow  clients  which
          remained relatively unchanged from the prior year, and higher consumer
          demand deposit growth;

     o    Yields on our earning assets were favorably impacted by the increasing
          interest rate environment and higher cash basis recoveries,  resulting
          in a higher  average  yield  of 46 basis  points  on  average  earning
          assets, despite being negatively impacted by lower hedge income, which
          decreased by $37.4 million; and

     o    In the first six months 2005,  we  continued to take  advantage of our
          ability  to  attract  lower  cost of funds  interest-bearing  core and
          noninterest-bearing  deposit balances, which represented approximately
          47.3  percent  and 47.5  percent of total  deposits,  in the first six
          months  2005 and  2004,


                                       32


<PAGE>


          respectively.   However,   our  cost  of  funds  on  interest  bearing
          liabilities   was   negatively   impacted  by  the   increasing   rate
          environment,  resulting in a higher  average cost of  interest-bearing
          liabilities  of 67 basis points,  which  included  lower hedge income,
          which decreased by $4.7 million.

     As a result of these changes,  our net interest margin increased by 7 basis
points.

     We use derivatives to hedge expected  changes in the yields on our variable
rate loans and term certificates of deposit (CDs), and to convert our long-term,
fixed-rate  borrowings to floating  rate.  During 2005, we expect our derivative
positions  will provide less in net interest  income than in 2004,  as positions
mature and, to a lesser extent, as interest rates rise.  However,  we expect the
declines  in hedge  income to be  partially  offset by  increased  yields on the
underlying variable rate loans. For the six months ended June 30, 2004 and 2005,
we had hedge income of $59.0 million and $16.9 million, respectively.

NONINTEREST INCOME

<TABLE>
<CAPTION>

                                  FOR THE THREE MONTHS ENDED                 FOR THE SIX MONTHS ENDED
                             -------------------------------------     --------------------------------------
                                                 INCREASE (DECREASE)                       INCREASE (DECREASE)
                             JUNE 30,  JUNE 30,  ------------------    JUNE 30,  JUNE 30,  ------------------
(DOLLARS IN THOUSANDS)         2004      2005     AMOUNT    PERCENT      2004      2005     AMOUNT    PERCENT
---------------------------  --------  --------  --------   -------    --------  --------  --------   -------
<S>                          <C>       <C>       <C>         <C>       <C>       <C>       <C>          <C>
Service charges on deposit
  accounts.................  $ 90,031  $ 80,757  $ (9,274)   (10.3)%   $171,127  $161,212  $ (9,915)    (5.8)%
Trust and investment
  management fees..........    36,788    41,590     4,802     13.1       72,610    83,553    10,943     15.1
Insurance commissions......    18,652    19,340       688      3.7       40,387    41,357       970      2.4
International commissions
  and fees.................    18,102    18,326       224      1.2       35,647    36,000       353      1.0
Merchant banking fees......     7,714    18,114    10,400       nm       15,181    24,380     9,199     60.6
Foreign exchange gains, net     8,294     9,296     1,002     12.1       16,638    18,236     1,598      9.6
Brokerage commissions and
  fees.....................     8,023     8,605       582      7.3       16,320    17,577     1,257      7.7
Card processing fees, net      15,456     6,464    (8,992)   (58.2)      24,248    12,071   (12,177)   (50.2)
Securities gains (losses),
  net......................        (4)  (13,313)  (13,309)      nm        1,618   (12,969)  (14,587)      nm
Gain on private capital
  investments, net.........     4,017     5,261     1,244     31.0        7,331    13,196     5,865     80.0
Gain on sale of merchant
  card portfolio...........    93,000        --   (93,000)      nm       93,000        --   (93,000)      nm
Other......................    30,937    26,910    (4,027)   (13.0)      48,108    49,498     1,390      2.9
                             --------  --------  --------              --------  --------  --------
    Total noninterest
      income...............  $331,010  $221,350  $109,660    (33.1)%   $542,215  $444,111  $ 98,104    (18.1)%
                             ========  ========  ========              ========  ========  ========
-------------
<FN>

nm--not meaningful
</FN>
</TABLE>

NONINTEREST EXPENSE
<TABLE>
<CAPTION>

                                   FOR THE THREE MONTHS ENDED                FOR THE SIX MONTHS ENDED
                             --------------------------------------    --------------------------------------
                                                 INCREASE (DECREASE)                       INCREASE (DECREASE)
                             JUNE 30,  JUNE 30,  ------------------    JUNE 30,  JUNE 30,  ------------------
(DOLLARS IN THOUSANDS)         2004      2005     AMOUNT    PERCENT      2004      2005     AMOUNT    PERCENT
---------------------------  --------  --------  --------   -------    --------  --------  --------   -------
<S>                          <C>       <C>       <C>           <C>     <C>       <C>       <C>            <C>
Salaries and other
  compensation.............  $174,894  $193,256  $ 18,362      10.5%   $345,324  $378,450  $ 33,126       9.6%
Employee benefits..........    42,703    48,397     5,694      13.3      91,696   102,683    10,987      12.0
                             --------  --------  --------              --------  --------  --------
  Salaries and employee
    benefits...............   217,597   241,653    24,056      11.1     437,020   481,133    44,113      10.1
Net occupancy..............    32,173    34,681     2,508       7.8      63,755    68,206     4,451       7.0
Outside services...........    17,406    27,320     9,914      57.0      33,865    49,216    15,351      45.3
Equipment..................    16,883    17,292       409       2.4      34,154    35,025       871       2.6
Professional services......    10,290    20,682    10,392     101.0      21,593    34,392    12,799      59.3
Software...................    12,908    15,617     2,709      21.0      25,903    30,245     4,342      16.8
Communications.............    11,810    11,067      (743)     (6.3)     23,968    22,603    (1,365)     (5.7)
Data processing............     8,409     8,663       254       3.0      16,826    17,752       926       5.5
Advertising and public
  relations................    10,814     9,022    (1,792)    (16.6)     19,541    16,773    (2,768)    (14.2)
Intangible asset
  amortization.............     4,485     4,985       500      11.1       8,705     9,971     1,266      14.5
Foreclosed asset expense
  (income).................        17    (2,577)   (2,594)       nm         536    (2,171)   (2,707)       nm
Reversal of allowance for
  losses on off-balance
  sheet commitments(1).....        --    (4,000)   (4,000)       nm          --    (1,000)   (1,000)       nm
Other......................    33,610    24,785    (8,825)    (26.3)     63,642    54,512    (9,130)    (14.3)
                             --------  --------  --------              --------  --------  --------
    Total noninterest
      expense..............  $376,402  $409,190  $ 32,788       8.7%   $749,508  $816,657  $ 67,149       9.0%
                             ========  ========  ========              ========  ========  ========
----------------
<FN>

(1)  Beginning  in the  quarter  ended  March 31,  2005,  the net  change in the
     allowance  for  losses on  off-balance  sheet  commitments  was  recognized
     separately from the change in the allowance for loan losses.  Prior periods
     have not been restated.

nm--not meaningful
</FN>
</TABLE>

                                       33

<PAGE>


INCOME TAX EXPENSE

     Income tax expense in the second  quarter of 2005  resulted in a 35 percent
effective  income tax rate compared with an effective tax rate of 37 percent for
the second  quarter of 2004.  The  decrease  in the  effective  tax rate was due
primarily to increased tax credits and lower state taxes.

     Income tax expense in the first six months of 2005 resulted in a 33 percent
effective  tax rate  compared  with an effective  tax rate of 36 percent for the
first six months of 2004.  The  decrease  in the  year-to-date  tax rate was due
primarily  to a reduction in reserves of $10.0  million in the first  quarter of
2005 for estimated  amounts owed to the Internal Revenue Service with respect to
certain leveraged leasing transactions.

     For further information regarding income tax expense, see our Annual Report
on Form 10-K for the year ended December 31, 2004.

LOANS

     The following table shows loans outstanding by loan type.

<TABLE>
<CAPTION>

                                                                                     INCREASE (DECREASE)
                                                                                     JUNE 30, 2005 FROM:
                                                                          ----------------------------------------
                                 JUNE 30,    DECEMBER 31,    JUNE 30,           JUNE 30,          DECEMBER 31,
                                   2004          2004          2005               2004                2004
                                -----------  ------------  -----------    -------------------  -------------------
(DOLLARS IN THOUSANDS)                                                      AMOUNT    PERCENT    AMOUNT    PERCENT
------------------------------                                            ----------  -------  ----------  -------
<S>                             <C>          <C>           <C>            <C>           <C>    <C>           <C>
Domestic:
  Commercial, financial and
    industrial................  $ 9,237,338  $  9,761,096  $10,353,000    $1,115,662    12.1%  $  591,904    6.1%
  Construction................    1,078,630     1,130,070    1,240,752       162,122    15.0      110,682    9.8
  Mortgage:
    Residential...............    8,224,715     9,538,150   10,457,449     2,232,734    27.1      919,299    9.6
    Commercial................    4,288,867     5,409,029    5,538,578     1,249,711    29.1      129,549    2.4
                                -----------  ------------  -----------    ----------           ----------
      Total mortgage..........   12,513,582    14,947,179   15,996,027     3,482,445    27.8    1,048,848    7.0
  Consumer:
    Installment...............      794,428       767,767      790,963       (3,465)    (0.4)      23,196    3.0
    Revolving lines of credit.    1,379,751     1,581,866    1,676,703       296,952    21.5       94,837    6.0
                                -----------  ------------  -----------    ----------           ----------
      Total consumer..........    2,174,179     2,349,633    2,467,666       293,487    13.5      118,033    5.0
  Lease financing.............      605,358       609,090      594,952      (10,406)    (1.7)     (14,138)  (2.3)
                                -----------  ------------  -----------    ----------           ----------
      Total loans in domestic
        offices...............   25,609,087    28,797,068   30,652,397     5,043,310    19.7    1,855,329    6.4
Loans originated in foreign
  branches....................    1,981,815     1,801,988    1,830,313     (151,502)    (7.6)      28,325    1.6
                                -----------  ------------  -----------    ----------           ----------
    Total loans held to
      maturity................   27,590,902    30,599,056   32,482,710     4,891,808    17.7    1,883,654    6.2
    Total loans held for sale.        3,369       117,900       15,511        12,142      nm     (102,389) (86.8)
                                -----------  ------------  -----------    ----------           ----------
        Total loans...........  $27,594,271  $ 30,716,956  $32,498,221    $4,903,950    17.8%  $1,781,265    5.8%
                                ===========  ============  ===========    ==========           ==========
---------------
<FN>
nm--not meaningful
</FN>
</TABLE>

     COMMERCIAL, FINANCIAL AND INDUSTRIAL LOANS

     Commercial,  financial and  industrial  loans  represent one of the largest
categories  in the loan  portfolio.  These  loans are  extended  principally  to
corporations,  middle-market businesses, and small businesses,  with no industry
concentration  exceeding 10 percent of total loans. In addition,  we believe our
geographic  diversification  based upon our customers'  revenue bases lowers our
vulnerability  to changes  in the  regional  and  national  outlook  for the U.S
economy.

     Our commercial market lending  originates  primarily through our commercial
banking offices. These offices, which rely extensively on  relationship-oriented
banking,  provide a variety of services including depository and cash management
services,   lines  of  credit,  accounts  receivable  and  inventory  financing.
Separately,  we originate or participate in a wide variety of financial services
to major corporations. These services include traditional commercial banking and
specialized  financing  tailored  to  the  needs  of  each


                                       34

<PAGE>


customer's specific industry.  Presently, we are active in, among other sectors,
the oil and gas,  entertainment,  retailing,  power and  utilities and financial
services industries.

     The  commercial,  financial and industrial  loan portfolio  increase in the
second quarter of 2005 from the second  quarter of 2004 was mainly  attributable
to increased loan demand in the California middle market and specialty segments,
which reflected the improving  economy in those markets and an increase in loans
extended to our title company clients.

     CONSTRUCTION AND COMMERCIAL MORTGAGE LOANS

     We engage in non-residential  real estate lending that includes  commercial
mortgage loans and  construction  loans secured by deeds of trust.  Construction
loans are made  primarily to commercial  property  developers and to residential
builders.

     The construction loan portfolio increase in the second quarter of 2005 from
the  second  quarter  of 2004  was  attributable  to  increased  demand  for new
single-family  homes, as well as apartment,  retail building and REIT financing.
This growth occurred despite continued high office vacancy rates in our markets,
which was a factor  that  impacted  the level of  development  and  construction
projects we financed.

     The commercial  mortgage loan portfolio consists of loans on commercial and
industrial  projects  primarily  in  California.   The  increase  in  commercial
mortgages  in the second  quarter  of 2005 from the  second  quarter of 2004 was
mainly  attributable  to our  acquisition of Jackson  Federal Bank in the fourth
quarter of 2004,  offset by substantial  commercial  mortgage  refinancings with
other lenders.

     RESIDENTIAL MORTGAGE LOANS

     We originate  residential  mortgage  loans,  secured by one-to-four  family
residential   properties,   through  our  multiple  channel  network  (including
branches, mortgage brokers, and loan-by-phone) throughout California, Oregon and
Washington,  and we periodically  purchase loans in our market area. At June 30,
2005,  55 percent of our  residential  mortgage  loans were  interest  only.  At
origination,  these  interest  only  loans had high  credit  scores and below 80
percent  loan-to-value  (LTV) ratios. The remainder of the portfolio consists of
balloon or regular amortizing loans, of which none are negative amortizing.

     The  increase  in  residential  mortgages  in the  second  quarter  of 2005
compared  to second  quarter of 2004 was  primarily  driven by  adjustable  rate
mortgages  (ARMs).  Contributing to this increase were very attractive  mortgage
rates in the latter  half of 2004 and higher  home  prices.  We hold most of the
loans we  originate,  selling  only our  30-year,  fixed rate loans,  except for
Community Reinvestment Act (CRA) loans.

     CONSUMER LOANS

     We originate  consumer loans,  such as auto loans and home equity loans and
lines,  through  our branch  network.  The  primary  driver of the  increase  in
consumer  loans was our  "Flex  Equity  Line/Loan"  product.  The  "Flex  Equity
Line/Loan"  allows our customers the  flexibility to manage a line of credit and
as many as four fixed rate loans under a single product.

     LEASE FINANCING

     We primarily offer two types of leases to our customers:  direct  financing
leases,  where the assets leased are acquired without additional  financing from
other  sources;  and  leveraged  leases,  where  a  substantial  portion  of the
financing  is  provided  by debt with no  recourse  to us.  The lease  financing
decrease from June 30, 2004 was  attributable to the run-off of our discontinued
auto leasing  activity.  At June 30, 2005, our auto lease portfolio had declined
to $9.3  million and will fully mature by mid-year  2006.  Included in our lease
portfolio are leveraged  leases of $577 million,  which are net of  non-recourse
debt of  approximately  $1.2  billion.  We utilize a number of  special  purpose
entities for our leveraged  leases.  These entities serve legal and tax purposes
and do not  function  as vehicles to shift  liabilities  to other  parties or to


                                       35

<PAGE>


deconsolidate affiliates for financial reporting purposes. As allowed by US GAAP
and by law, the gross lease receivable is offset by the qualifying  non-recourse
debt. In leveraged lease  transactions,  the third-party lender may only look to
the collateral value of the leased assets for repayment.

     LOANS ORIGINATED IN FOREIGN BRANCHES

     Our loans originated in foreign  branches  consist  primarily of short-term
extensions  of credit to financial  institutions  located  primarily in Asia and
energy-related lending in Canada.

CROSS-BORDER OUTSTANDINGS

     Our  cross-border  outstandings  reflect  certain  additional  economic and
political  risks that are not  reflected in domestic  outstandings.  These risks
include those arising from exchange rate  fluctuations  and  restrictions on the
transfer of funds. The following table sets forth our cross-border  outstandings
as of June 30, 2004,  December 31, 2004 and June 30, 2005, for any country where
such  outstandings   exceeded  1  percent  of  total  assets.  The  cross-border
outstandings were compiled based upon category and domicile of ultimate risk and
are  comprised  of  balances  with banks,  trading  account  assets,  securities
available for sale, securities purchased under resale agreements, loans, accrued
interest  receivable,  acceptances  outstanding  and  investments  with  foreign
entities.  For any  country  shown in the table  below,  any  significant  local
currency outstandings are either hedged or funded by local currency borrowings.

<TABLE>
<CAPTION>


                                            PUBLIC   CORPORATIONS
                               FINANCIAL    SECTOR     AND OTHER      TOTAL
(DOLLARS IN MILLIONS)        INSTITUTIONS  ENTITIES    BORROWERS   OUTSTANDINGS
---------------------------  ------------  --------  ------------  ------------
<S>                              <C>         <C>          <C>          <C>
June 30, 2004
Korea......................      $769        $--          $4           $773
December 31, 2004
Korea......................      $615        $--          $3           $618
June 30, 2005
Korea......................      $626        $--          $7           $633

</TABLE>

REVERSAL OF ALLOWANCES FOR CREDIT LOSSES

     We recorded a reversal of the  allowance  for loan losses of $11 million in
the second  quarter of 2005,  compared  with a reversal  of  allowance  for loan
losses of $10 million in the second quarter of 2004.  Provisions for loan losses
are charged to income to bring our  allowance  for loan losses to a level deemed
appropriate by management based on the factors  discussed under  "Allowances for
Credit  Losses"  below.  Beginning  with  first  quarter  2005,  changes  in the
allowance for losses related to off-balance  sheet commitments are recognized in
noninterest expense. The change in the allowance for losses on off-balance sheet
commitments in the second quarter 2005 was a reversal of $4 million.

ALLOWANCES FOR CREDIT LOSSES

     ALLOWANCE POLICY AND METHODOLOGY

     We maintain  allowances for credit losses to absorb losses  inherent in the
loan  portfolio  as  well  as for  leases  and  off-balance  sheet  commitments.
Understanding  our policies on allowances  for credit losses is  fundamental  to
understanding our consolidated  financial condition and consolidated  results of
operations.  Accordingly, our significant policies and methodology on allowances
for  credit  losses  are  discussed  in  detail  in  Note  1 in  the  "Notes  to
Consolidated  Financial  Statements"  and in the section  "Allowances for Credit
Losses"  included in our  "Management's  Discussion  and  Analysis of  Financial
Condition  and Results of  Operations"  in our 2004 Annual  Report on Form 10-K,
which was filed with the Securities and Exchange Commission.



                                       36

<PAGE>


     COMPARISON OF THE TOTAL  ALLOWANCE AND RELATED  PROVISION FOR CREDIT LOSSES
     FROM DECEMBER 31, 2004

     At June 30, 2005, our total  allowances for credit losses was $477 million,
which  consisted  of $395  million  related to loans and $82 million  related to
off-balance  sheet  commitments.  The allowances for credit losses  consisted of
$384  million  and  $93  million  of  allocated   and   unallocated   allowance,
respectively.  At June 30, 2005,  our allowance for credit loss coverage  ratios
were 1.47 percent of total loans and 721 percent of total  nonaccrual  loans. At
December 31, 2004,  our total  allowances for credit losses was at $490 million,
or 1.59 percent of the total loan portfolio and 313 percent of total  nonaccrual
loans.

     In addition,  the allowance  incorporates the results of measuring impaired
loans as provided in SFAS No. 114,  "Accounting by Creditors for Impairment of a
Loan" as amended by SFAS No. 118,  "Accounting  by Creditors for Impairment of a
Loan - Income Recognition and Disclosures." These accounting standards prescribe
the measurement methods,  income recognition and disclosures related to impaired
loans.  At June  30,  2005,  total  impaired  loans  were $48  million,  and the
associated impairment allowance was $10 million,  compared with $102 million and
$32 million, respectively, at December 31, 2004.

     At June 30, 2005 and December 31, 2004,  the  allowances for losses related
to off-balance sheet commitments included within our total allowances for credit
losses,  were $82 million and $83  million,  respectively.  In  determining  the
adequacy of our allowances for credit losses, we consider both the allowance for
loan losses and for losses on off-balance sheet commitments.

     During  the  second  quarter of 2005,  there  were no  material  changes in
estimation  methods or assumptions  that affected our  methodology for assessing
the appropriateness of the formula and specific allowances for credit losses.

     As a result of management's  assessment of factors,  including improvements
in the quality of our loan  portfolio,  the  continued  improvement  in the U.S.
economy and improving conditions in domestic markets in which we operate, offset
by the growth in the loan  portfolio and the adverse  impact of increasing  fuel
costs across the whole  economy,  we recorded a total reversal of our allowances
for credit losses of $15 million in the second quarter 2005.

     CHANGES IN THE ALLOCATED (FORMULA AND SPECIFIC) ALLOWANCE

     At June 30, 2005, the formula allowance increased to $365 million, compared
to $361  million at December 31,  2004.  The  increase was due  primarily to the
impact of increases in both the loss factors and growth in our  pass-graded  and
homogeneous pooled loans.

     At June 30, 2005, the specific allowance decreased to $19 million, compared
to $46 million at December 31, 2004.  This  decrease is primarily  reflective of
lower nonaccrual loans and leases.

     CHANGES IN THE UNALLOCATED ALLOWANCE

     At June 30, 2005, the unallocated  allowance  increased to $93 million from
$83  million at December  31,  2004,  reflecting  the  heightened  uncertainties
surrounding  the economy and some  indications  that the  improvement  in credit
quality  could be  reaching  its peak.  Additionally,  the  reasons for which an
unallocated allowance is warranted are detailed below.

     In our assessment as of June 30, 2005,  management  focused, in particular,
on the factors and conditions set out below.  There can be no assurance that the
adverse  impact  of any of these  conditions  on us will not be in excess of the
ranges set forth.

     Although in certain  instances the downgrading of a loan resulting from the
effects of the  conditions  described  below has been  reflected  in the formula
allowance,   management  believes  that  the  impact  of  these  events  on  the
collectibility  of the applicable loans may not have been reflected in the level
of  nonperforming  loans or in the internal risk grading process with respect to
such loans. In addition,  our formula allowance does not take into consideration
sector-specific  changes in the  severity of losses  that are


                                       37

<PAGE>


expected to arise from current economic  conditions compared with our historical
losses. Accordingly, our evaluation of the probable losses related to the impact
of these factors was reflected in the unallocated allowance.  The evaluations of
the inherent  losses with respect to these factors are subject to higher degrees
of uncertainty because they are not identified with specific problem credits.

     The following describes the specific conditions we considered.

     o    With respect to fuel prices,  we  considered  the high and  increasing
          prices of oil and petroleum products,  and the impact across virtually
          all sectors of the economy, which could be in the range of $10 million
          to $39 million.

     o    With respect to leasing,  we considered a slight  improvement for some
          electric service  providers and the continued  weakness in the airline
          industry, which could be in the range of $12 million to $23 million.

     o    With  respect  to  commercial  real  estate,  we  considered  slightly
          improved  vacancy  rates and stagnant  rent growth  being  experienced
          nationally, with specific weakness in Northern California, which could
          be in the range of $10 million to $22 million.

     o    With respect to  concentrated  sales (which include  suppliers of "big
          box"  stores  like  Costco,  Wal-Mart,  Home  Depot,  Lowe's and other
          companies  that generate 15 percent or more of their revenues from one
          customer),  we considered the potential  negative  impact  competitive
          market pricing would have on their profit  margins,  which could be in
          the range of $3 million to $6 million.

     o    With respect to cross-border  exposures in certain foreign  countries,
          we  considered  the  positive  effect  that the  inflow  of funds  and
          reconstruction  efforts  resulting  from the December 26, 2004 tsunami
          are having on certain  Southeast Asian  economies,  the elimination of
          our exposure in Eastern  Europe,  and the  political and national debt
          situation  in the  Philippines,  which  could  be in the  range  of $2
          million to $4 million.

     Accordingly, our evaluation of the probable losses related to the impact of
these factors was reflected in the unallocated allowance.








                                       38

<PAGE>


     CHANGE IN THE TOTAL ALLOWANCES FOR CREDIT LOSSES

     The  following  table  sets  forth  a  reconciliation  of  changes  in  our
allowances for credit losses:

<TABLE>
<CAPTION>

                                     FOR THE
                                   THREE MONTHS                          FOR THE SIX MONTHS
                                  ENDED JUNE 30,    INCREASE (DECREASE)    ENDED JUNE 30,    INCREASE (DECREASE)
                                ------------------  ------------------   ------------------  ------------------
(DOLLARS IN THOUSANDS)            2004      2005      AMOUNT   PERCENT     2004      2005      AMOUNT   PERCENT
------------------------------- --------  --------  ---------  -------   --------  --------  ---------  -------
<S>                             <C>       <C>       <C>         <C>      <C>       <C>       <C>         <C>
Balance, beginning of period... $521,111  $404,231  $(116,880)  (22.4)%  $532,970  $407,156  $(125,814)  (23.6)%
Loans charged off:
  Commercial, financial and
    industrial.................   20,721     9,936    (10,785)  (52.0)     40,510    22,436    (18,074)  (44.6)
  Construction.................       --        --         --      --          --       118        118      nm
  Commercial mortgage..........       43        11        (32)  (74.4)         43     1,307      1,264      nm
  Consumer.....................    1,460     1,018       (442)  (30.3)      3,275     2,101     (1,174)  (35.8)
  Lease financing..............    1,666        71     (1,595)  (95.7)      2,024       201     (1,823)  (90.1)
                                --------  --------  ---------            --------  --------  ---------
    Total loans charged off....   23,890    11,036    (12,854)  (53.8)     45,852    26,163    (19,689)  (42.9)
Recoveries of loans previously
  charged off:
  Commercial, financial and
    industrial.................   12,091    12,232        141     1.2      20,911    31,832     10,921    52.2
  Construction.................       --        34         34      nm          --        34         34      nm
  Commercial mortgage..........    1,571        25     (1,546)  (98.4)      1,571        48     (1,523)  (96.9)
  Consumer.....................      456       411        (45)   (9.9)        891     1,000        109    12.2
  Lease financing..............       77       119         42    54.5         150       136        (14)   (9.3)
                                --------  --------  ---------            --------  --------  ---------
    Total recoveries of loans
      previously charged off...   14,195    12,821     (1,374)   (9.7)     23,523    33,050      9,527    40.5
                                --------  --------  ---------            --------  --------  ---------
      Net loans charged off
        (recovered)............    9,695    (1,785)   (11,480) (118.4)     22,329    (6,887)   (29,216) (130.8)
Reversal of allowance for loan
  losses.......................  (10,000)  (11,000)    (1,000)   10.0     (15,000)  (19,000)    (4,000)   26.7
Foreign translation adjustment
  and other net additions
  (deductions)(1)..............        3       (44)       (47)     nm       5,778       (71)    (5,849) (101.2)
                                --------  --------  ---------            --------  --------  ---------
Ending balance of allowance
  for loan losses(2)........... $501,419  $394,972  $(106,447)  (21.2)%  $501,419  $394,972  $(106,447)  (21.2)%
Allowance for losses on off-
  balance sheet commitments(2).       --    81,375     81,375      nm          --    81,375     81,375      nm
                                --------  --------  ---------            --------  --------  ---------
Allowance for credit losses.... $501,419  $476,347   $(25,072)   (5.0)%  $501,419  $476,347   $(25,072)   (5.0)%
                                ========  ========  =========            ========  ========  =========
Allowance for credit losses to
  total loans.................      1.82%     1.47%                          1.82%     1.47%
Reversal of allowance for loan
  losses to net loans charged
  off (recovered)..............       nm    616.25                             nm    275.88
Net loans charged off
  (recovered) to average loans
  outstanding for the period(3)     0.15     (0.02)                          0.17     (0.04)
------------------
<FN>

(1)  Includes   $5.7  million   related  to  the  Business  Bank  of  California
     acquisition in the first quarter of 2004.
(2)  On December 31, 2004, UnionBanCal Corporation transferred the allowance for
     losses on off-balance  sheet  commitments of $83 million from allowance for
     loan losses to other  liabilities.  At June 30,  2005,  the  allowance  for
     losses  on  off-balance  commitments  was $82  million.  Periods  prior  to
     December 31, 2004 have not been restated.
(3)  Annualized.

nm--not meaningful
</FN>
</TABLE>

     Total  loans  charged off in the second  quarter  2005  decreased  from the
second quarter 2004,  primarily  attributable  to  improvements in loan quality.
Charge-offs  reflect  the  realization  of  losses  in the  portfolio  that were
recognized previously through provisions for credit losses. In addition,  second
quarter 2005  recoveries  of loans  previously  charged off  decreased  from the
second  quarter  of  2004,  primarily   attributable  to  higher  recoveries  of
commercial  mortgages in the second quarter of 2004.  Such  fluctuations


                                       39

<PAGE>


in loan  recoveries  from  year-to-year  are due to  variability  in  timing  of
recoveries and tend to trail the periods in which charge-offs are recorded.

NONPERFORMING ASSETS

     Nonperforming  assets consist of nonaccrual  loans and  foreclosed  assets.
Nonaccrual  loans are those for which  management  has  discontinued  accrual of
interest because there exists significant  uncertainty as to the full and timely
collection   of  either   principal  or  interest  or  such  loans  have  become
contractually past due 90 days with respect to principal or interest. For a more
detailed  discussion of the accounting for nonaccrual  loans,  see Note 1 to our
Consolidated  Financial Statements in our 2004 Annual Report on Form 10-K, which
has been filed with the Securities and Exchange Commission.

     Foreclosed   assets  include  property  where  we  acquired  title  through
foreclosure or "deed in lieu" of foreclosure.

     The following table sets forth an analysis of nonperforming assets.

<TABLE>
<CAPTION>

                                                                               INCREASE (DECREASE)
                                                                               JUNE 30, 2005 FROM:
                                                                    ---------------------------------------
                                                                          JUNE 30,           DECEMBER 31,
                                                                            2004                2004
                                JUNE 30,  DECEMBER 31,  JUNE 30,    ------------------   ------------------
(DOLLARS IN THOUSANDS)            2004        2004        2005        AMOUNT   PERCENT    AMOUNT    PERCENT
------------------------------- --------  ------------  --------    ---------  -------   --------   -------
<S>                             <C>       <C>           <C>         <C>         <C>      <C>         <C>
Commercial, financial and
  industrial................... $111,015  $     72,600  $ 35,510    $ (75,505)  (68.0)%  $(37,090)   (51.1)%
Construction...................    5,401         2,622     1,425       (3,976)  (73.6)     (1,197)   (45.7)
Commercial mortgage............   22,717        26,520    11,168      (11,549)  (50.8)    (15,352)   (57.9)
Lease financing................   36,719        54,894    17,960      (18,759)  (51.1)    (36,934)   (67.3)
Loan originated in foreign
  branches.....................    2,210            --        --       (2,210) (100.0)         --       --
                                --------  ------------  --------    ---------            --------
    Total nonaccrual loans.....  178,062       156,636    66,063     (111,999)  (62.9)    (90,573)   (57.8)
Foreclosed assets..............    5,851         7,282     2,882       (2,969)  (50.7)     (4,400)   (60.4)
                                --------  ------------  --------    ---------            --------
    Total nonperforming assets. $183,913  $    163,918  $ 68,945    $(114,968)  (62.5)   $(94,973)   (57.9)
                                ========  ============  ========    =========            ========
Allowances for credit losses(1) $501,419  $    489,531  $476,347    $ (25,072)   (5.0)%  $(13,184)    (2.7)%
                                ========  ============  ========    =========            ========
Nonaccrual loans to total loans    0.65%          0.51%     0.20%
Allowances for credit losses to
  nonaccrual loans.............   281.60        312.53    721.05
Nonperforming assets to total
  loans and foreclosed assets..     0.67          0.53      0.21
Nonperforming assets to total
  assets.......................     0.40          0.34      0.13
--------------------
<FN>

(1)  Includes allowance for losses on off-balance sheet commitments.
</FN>
</TABLE>

     At June 30, 2005, our  nonperforming  assets included  approximately  $18.0
million in aircraft leases and $15.3 million in acquired  syndicated  loans. The
decrease in  nonaccrual  lease  financings  was  primarily  due to the return to
accrual status of an aircraft  lease.  During the second quarter 2005, we had no
sales of nonperforming  loans compared to approximately $8 million in the second
quarter 2004. Losses from these sales were reflected in our charge-offs.







                                       40

<PAGE>


LOANS 90 DAYS OR MORE PAST DUE AND STILL ACCRUING

<TABLE>
<CAPTION>

                                                                              INCREASE (DECREASE)
                                                                              JUNE 30, 2005 FROM:
                                                                    ---------------------------------------
                                JUNE 30,  DECEMBER 31,  JUNE 30,          JUNE 30,          DECEMBER 31,
                                  2004        2004        2005              2004                2004
                                --------  ------------  --------    ------------------   ------------------
(DOLLARS IN THOUSANDS)                                                AMOUNT   PERCENT    AMOUNT    PERCENT
-------------------------------                                     ---------  -------   --------   -------
<S>                             <C>       <C>           <C>         <C>         <C>      <C>         <C>
Commercial, financial and
  industrial................... $    798  $      1,315  $    578    $    (220)  (27.6)%  $   (737)   (56.0)%
Construction...................    2,919            --     1,180       (1,739)  (59.6)      1,180       nm
Mortgage:
  Residential..................    4,588         1,385     1,929       (2,659)  (58.0)        544     39.3
  Commercial...................       --            --        30           30      nm          30       nm
                                --------  ------------  --------    ---------            --------
    Total mortgage.............    4,588         1,385     1,959       (2,629)  (57.3)        574     41.4
Consumer and other.............    1,535         1,157       643         (892)  (58.1)       (514)   (44.4)
                                --------  ------------  --------    ---------            --------
Total loans 90 days or more
  past due and still accruing.. $  9,840  $      3,857  $  4,360    $  (5,480)  (55.7)%  $    503      13.0%
                                ========  ============  ========    =========            ========
------------------
<FN>
nm = not meaningful
</FN>
</TABLE>

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     Our exposure to market risk exists  primarily in interest  rate risk in our
non-trading  balance  sheet and to a much  lesser  degree  in price  risk in our
trading portfolio for our  customer-focused  trading and sales  activities.  The
objective of market risk  management is to mitigate an undue  adverse  impact on
earnings and capital  arising  from  changes in interest  rates and other market
variables.  This risk  management  objective  supports  our broad  objective  of
preserving  shareholder value,  which encompasses  earnings growth over time and
capital stability.

     The Board of Directors, through its Finance and Capital Committee, approves
our  Asset-Liability  Management  (ALM) Policy,  which governs the management of
market risk and liquidity. In the administration of market risk management,  the
Chief Executive  Officer (CEO) Forum provides broad and strategic  guidance and,
as appropriate, specific direction to the Asset & Liability Management Committee
(ALCO)  whose  voting  members  are  comprised  of  senior  executives.  ALCO is
responsible  for ongoing  management of interest rate and price risks as well as
liquidity  risk,  including  formulation  of  risk  management  strategies,   in
accordance  with  the  CEO  Forum's  directives.   The  Treasurer  is  primarily
responsible for the  implementation  of risk management  strategies  approved by
ALCO and for operating management of market risk through the funding, investment
and derivatives hedging activities of Corporate Treasury.

     The Market Risk Monitoring (MRM) unit is responsible for the monitoring and
reporting of market risk,  including  ensuring that ALCO, our senior  management
and the  Board  are kept  fully  informed  as to our  market  risk  profile  and
compliance  with  applicable  limits,  guidelines  and  policies.  MRM functions
independently of all operating and management units.

     We have  separate  and  distinct  methods  for  managing  the  market  risk
associated with our ALM activities and our trading activities.

     INTEREST RATE RISK MANAGEMENT (OTHER THAN TRADING)

     During  the  second  quarter  2005,  our  asset-sensitivity   continued  to
increase. This reflected the strategic decision to allow maturing ALM securities
and derivative positions to run-off.  These actions were


                                       41

<PAGE>


complemented  by  changes  in the core  balance  sheet  that  tended to  promote
increased asset-sensitivity.  For additional information,  see--"ALM Activities"
section below.

     The increase in our  asset-sensitivity  is evidenced in the table below.  A
+200 basis points  parallel  rate shift at June 30, 2005 would have  produced an
estimated 2.7 percent  increase in Economic NII (net interest  income),  while a
-200 basis  points shift would have  lowered  Economic  NII by an estimated  3.5
percent.   This  compares  with  an  estimated  1.1  percent  and  1.5  percent,
respectively,  at June 30, 2004.  We caution,  however,  that  modeling  changes
implemented  over this period may make  year-over-year  comparisons  misleading.
Economic NII adjusts our  reported  NII for the effect of certain  non-interest,
DDA-related,  fee  and  expense  items.  Those  adjustment  items  are  innately
liability-sensitive,  meaning that reported NII is more  asset-sensitive than is
Economic NII.

ECONOMIC NII

                                                        JUNE 30,     JUNE 30,
(DOLLARS IN MILLIONS)                                     2004         2005
------------------------------------------------------  --------    ---------
+200 basis points.....................................    $17.2       $51.3
as a percentage of base case NII......................      1.13%       2.68%
-200 basis points.....................................   $(23.1)     $(66.5)
as a percentage of base case NII......................      1.52%       3.48%


     In the case of non-parallel yield curve changes, we remain  asset-sensitive
both to changes in long-term rates (with  short-term rates held constant) and to
the converse.

     ALM ACTIVITIES

     In general,  our unhedged,  core balance sheet is asset sensitive,  meaning
that our loans  generally  re-price  more  quickly  than our core  deposits.  In
managing  the  interest  sensitivity  of  our  balance  sheet,  we use  the  ALM
securities portfolio and derivatives  positions as our primary tools. During the
second  quarter,  we  continued to allow  maturations  in our  relatively  short
duration ALM securities to help support loan growth. Together with the continued
maturation of our existing  derivative hedges, this had the effect of increasing
our asset-sensitivity during the course of the second quarter.

     ALM INVESTMENTS

     At June 30, 2005, our securities available for sale portfolio included $9.0
billion of securities for ALM purposes,  compared with $11.7 billion at June 30,
2004. During the second quarter 2005, in addition to allowing our ALM fixed rate
portfolio to run off as part of our strategy to allow our core asset sensitivity
to increase, we sold $475 million of low-yielding Agency securities to fund loan
growth. The estimated ALM portfolio effective duration was 1.9 at June 30, 2005,
compared to 2.7 at June 30, 2004.

     Effective duration is a measure of price sensitivity of a bond portfolio to
immediate  parallel  shifts in  interest  rates.  An  effective  duration of 1.9
suggests  an expected  price  change of  approximately  minus 1.9 percent for an
immediate one percent rise in interest rates.

     ALM DERIVATIVES

     We also  continued to allow our ALM  derivatives  to mature and reduced the
net level of interest rate derivatives by $830 million during the quarter.  This
strategy  further  contributed  to  our  rising  core   asset-sensitivity.   For
additional discussion of derivative instruments and our hedging strategies,  see
Note 8 to our  Condensed  Consolidated  Financial  Statements  included  in this
report and Note 18 to our  Consolidated  Financial  Statements  included  in our
Annual Report on Form 10-K for the year ended December 31, 2004.


                                       42

<PAGE>


     TRADING ACTIVITIES

     Effective January 1, 2005, the Securities  Trading and Institutional  Sales
department,  which serves the fixed-income  needs of our institutional  clients,
was  combined  with  the  retail  brokerage   operations  of  our  broker/dealer
subsidiary,  UnionBanc  Investment  Services  LLC.  The  vast  majority  of  our
securities trading income comes from  customer-related  transactions.  UnionBanc
Investment  Services  LLC's  trading  risk  is  closely  monitored  and  tightly
controlled using the existing Value-at-Risk methodology.

     We began marketing energy derivatives contracts to existing energy industry
customers, primarily oil and gas producers, in late 2004, in order to meet their
hedging needs. Volume increased from $42 million in notional amount of contracts
outstanding  as of  December  31,  2004 to $650  million  as of June  30,  2005.
Consistent  with  our  customer   interest  rate   derivatives   business,   all
transactions  are fully  matched to remove our  exposure  to market  risk,  with
income produced from the credit spread earned.

     For information about the market risk in our trading activities, please see
"Quantitative  and Qualitative  Disclosures  about Market Risk" in "Management's
Discussion and Analysis of Financial Condition and Results of Operations" in our
Annual Report on Form 10-K for the year ended December 31, 2004.

LIQUIDITY RISK

     Liquidity risk represents the potential for loss as a result of limitations
on our ability to adjust our future  cash flows to meet the needs of  depositors
and borrowers and to fund operations on a timely and  cost-effective  basis. The
ALM Policy  approved by the Finance and Capital  Committee of the Board requires
regular reviews of our liquidity by ALCO. ALCO conducts  monthly ongoing reviews
of our  liquidity  situation  as well as  regular  updates  to our CEO Forum who
approve our liquidity  contingency plan.  Liquidity is managed through this ALCO
coordination  process on an entity-wide  basis,  encompassing all major business
units. The operating  management of liquidity is implemented through the funding
and investment  functions.  Our liquidity management draws upon the strengths of
our extensive  retail and commercial  core deposit  franchise,  coupled with the
ability  to  obtain  funds  for  various  terms in a  variety  of  domestic  and
international money markets.  Our securities  portfolio represents a significant
source of additional liquidity.

     Core deposits  provide us with a sizable  source of  relatively  stable and
low-cost funds. Our average core deposits,  which include demand deposits, money
market  demand  accounts,  and savings and time  deposits  (of $100  thousand or
less), combined with average common stockholders' equity, funded over 82 percent
of average  total assets of $49 billion in the second  quarter of 2005.  Most of
the  remaining  funding was  provided by  short-term  borrowings  in the form of
negotiable  certificates  of deposit,  large time  deposits,  foreign  deposits,
federal funds purchased, securities sold under repurchase agreements, commercial
paper, and other borrowings.

     The securities  portfolio provides additional  enhancement to our liquidity
position,  which may be created  through either  securities  sales or repurchase
agreements. At June 30, 2005, we could have sold or transferred under repurchase
agreements almost $7 billion of our available for sale securities. Liquidity may
also  be  provided   by  the  sale  or   maturity   of  other   assets  such  as
interest-bearing  deposits  in banks,  federal  funds sold and  trading  account
securities. The aggregate balance of these assets averaged $1 billion during the
quarter. Additional liquidity may be provided through loan maturities and sales.

REGULATORY CAPITAL

     The  following  tables  summarize  our  risk-based  capital,  risk-weighted
assets, and risk-based capital ratios.


                                       43

<PAGE>

<TABLE>
<CAPTION>

UNIONBANCAL CORPORATION

                                                                                     MINIMUM
                               JUNE 30,       DECEMBER 31,        JUNE 30,         REGULATORY
(DOLLARS IN THOUSANDS)           2004             2004             2005            REQUIREMENT
------------------------  ----------------  ----------------  ----------------  ----------------
<S>                       <C>               <C>               <C>
CAPITAL COMPONENTS
Tier 1 capital..........  $      3,706,202  $      3,817,698  $      3,814,576
Tier 2 capital..........           922,122           968,294           915,081
                          ----------------  ----------------  ----------------
Total risk-based capital  $      4,628,324  $      4,785,992  $      4,729,657
                          ================  ================  ================
Risk-weighted assets....  $     35,422,904  $     39,324,859  $     42,958,478
                          ================  ================  ================
Quarterly average assets  $     44,339,052  $     47,168,683  $     49,123,946
                          ================  ================  ================
</TABLE>
<TABLE>
<CAPTION>

CAPITAL RATIOS              AMOUNT   RATIO    AMOUNT   RATIO    AMOUNT   RATIO    AMOUNT   RATIO
------------------------  ---------- -----  ---------- -----  ---------- -----  ---------- -----
<S>                       <C>        <C>    <C>        <C>    <C>        <C>    <C>         <C>
Total capital (to
  risk-weighted assets).  $4,628,324 13.07% $4,785,992 12.17% $4,729,657 11.01%>$3,436,678  8.0%
Tier 1 capital (to
  risk-weighted assets).   3,706,202 10.46   3,817,698  9.71   3,814,576  8.88 > 1,718,339  4.0
Leverage(1).............   3,706,202  8.36   3,817,698  8.09   3,814,576  7.77 > 1,964,958  4.0
-------------
<FN>

(1)        Tier 1 capital divided by quarterly average assets (excluding certain intangible assets).
</FN>
</TABLE>

<TABLE>
<CAPTION>

UNION BANK OF CALIFORNIA, N.A.

                                                                                    MINIMUM      "WELL-CAPITALIZED"
                              JUNE 30,        DECEMBER 31,        JUNE 30,         REGULATORY        REGULATORY
(DOLLARS IN THOUSANDS)          2004              2004              2005          REQUIREMENT        REQUIREMENT
------------------------  ----------------  ----------------  ----------------  ----------------  ----------------
<S>                       <C>               <C>               <C>
CAPITAL COMPONENTS
Tier 1 capital..........  $      3,695,565  $      3,597,738  $      3,844,620
Tier 2 capital..........           476,900           493,756           457,607
                          ----------------  ----------------  ----------------
Total risk-based capital  $      4,172,465  $      4,091,494  $      4,302,227
                          ================  ================  ================
Risk-weighted assets....  $     34,925,361  $     38,711,682  $     42,299,041
                          ================  ================  ================
Quarterly average assets  $     43,688,650  $     46,588,762  $     48,528,048
                          ================  ================  ================

</TABLE>

<TABLE>
<CAPTION>

CAPITAL RATIOS              AMOUNT   RATIO    AMOUNT   RATIO    AMOUNT   RATIO    AMOUNT   RATIO    AMOUNT   RATIO
------------------------  ---------- -----  ---------- -----  ---------- -----  ---------- -----  ---------- -----
<S>                       <C>        <C>    <C>        <C>    <C>        <C>    <C>         <C>   <C>         <C>
Total capital (to risk-
  weighted assets)..      $4,172,465 11.95% $4,091,494 10.57% $4,302,227 10.17%>$3,383,923  8.0% >$4,229,904  10.0%
Tier 1 capital (to risk-
  weighted assets)......   3,695,565 10.58   3,597,738  9.29   3,844,620  9.09 > 1,691,962  4.0  > 2,537,942   6.0
Leverage(1).............   3,695,565  8.46   3,597,738  7.72   3,844,620  7.92 > 1,941,122  4.0  > 2,426,402   5.0
---------------
<FN>

(1)  Tier 1 capital  divided by  quarterly  average  assets  (excluding  certain
     intangible assets).
</FN>
</TABLE>

     We and Union Bank of California, N.A. are subject to various regulations of
the federal banking agencies,  including minimum capital  requirements.  We both
are  required  to  maintain  minimum  ratios  of  Total  and Tier 1  capital  to
risk-weighted  assets and of Tier 1 capital to  quarterly  average  assets  (the
Leverage ratio).

     The decrease in our capital ratios from June 30, 2004, was  attributable to
higher   risk-weighted   assets.  Our  Leverage  ratio  decrease  was  primarily
attributable  to a $5 billion,  or 11 percent,  increase  in  quarterly  average
assets,  which was substantially the result of increases in both our residential
mortgage and commercial loan portfolios.

     As of June 30, 2005,  management  believes the capital ratios of Union Bank
of  California,  N.A.  met all  regulatory  requirements  of  "well-capitalized"
institutions,  which are 10 percent for the Total  risk-based  capital  ratio, 6
percent for the Tier 1 risk-based  capital  ratio and 5 percent for the Leverage
ratio.

BUSINESS SEGMENTS

     In April 2005, we announced  several  organizational  changes that affected
our business  segments.  The Global  Markets Group has been  eliminated  and the
activities of this group have been  transferred.  Corporate  Treasury,  which is
responsible  for ALM and the investment  portfolio,  is now included in "Other."
The  trading  of  securities  and  foreign  exchange  contracts,  as well as the
responsibilities for customer accommodated derivative contracts are now included
in the  "Global  Markets  Division"  of the  Community  Banking  and  Investment
Services  Group.  We are now  organized  around the target  markets we serve and
operate  in three  principal  areas,  as shown in the table  that  follows.  The
results show the financial performance of our major business units.


                                       44

<PAGE>


     The  risk-adjusted  return on  capital  (RAROC)  methodology  used seeks to
attribute  economic  capital to business units consistent with the level of risk
they assume.  These risks are primarily credit,  market and operational.  Credit
risk is the  potential  loss in economic  value due to the  likelihood  that the
obligor will not perform as agreed.  Market risk is the  potential  loss in fair
value due to changes  in  interest  rates,  currency  rates and  equity  prices.
Operational  risk  is the  potential  loss  due to all  other  factors,  such as
failures in internal control,  system failures, or external events. RAROC is one
of several measures that is used to measure business unit compensation.

     The following  tables  reflect the condensed  income  statements,  selected
average balance sheet items, and selected  financial  ratios,  including changes
from the prior year, for each of our primary  business  units.  The  information
presented does not necessarily represent the business units' financial condition
and results of operations as if they were independent entities.  Also, the table
has been expanded to include  performance center earnings.  A performance center
is a special unit whose income  generating  activities,  unlike  typical  profit
centers,  are based on other business segment units' customer base. The revenues
generated  and  expenses  incurred  for  those  transactions   entered  into  to
accommodate  our customers are allocated to other  business  segments  where the
customer  relationships  reside.  A  performance  center's  purpose is to foster
cross-selling  with a total  profitability  view of the products and services it
manages.  For example,  the Securities  Trading and Sales unit within the Global
Markets  Division,  is a  performance  center  that  manages  the  fixed  income
securities  activities.  Unlike financial accounting,  there is no authoritative
body of guidance for management accounting equivalent to US GAAP.  Consequently,
reported  results are not  necessarily  comparable with those presented by other
companies.

     The RAROC  measurement  methodology  recognizes credit expense for expected
losses  arising  from credit risk and  attributes  economic  capital  related to
unexpected losses arising from credit, market and operational risks. As a result
of the  methodology  used by the  RAROC  model  to  calculate  expected  losses,
differences  between the provision  for credit losses and credit  expense in any
one period could be significant. However, over an economic cycle, the cumulative
provision  for credit  losses and credit  expense for expected  losses should be
substantially  the  same.  Business  unit  results  are  based  on  an  internal
management reporting system used by management to measure the performance of the
units and UnionBanCal  Corporation as a whole.  Our management  reporting system
identifies balance sheet and income statement items for each business unit based
on internal management  accounting  policies.  Net interest income is determined
using our internal funds transfer pricing system,  which assigns a cost of funds
to assets or a credit for funds to liabilities and capital, based on their type,
maturity or repricing  characteristics.  Noninterest income and expense directly
or indirectly attributable to a business unit are assigned to that business. The
business  units  are  assigned  the  costs of  products  and  services  directly
attributable to their business  activity  through  standard unit cost accounting
based on volume of usage. All other corporate expenses  (overhead) are allocated
to the business units based on a predetermined percentage of usage.


                                       45

<PAGE>


     The business  units'  results for the prior  periods have been  restated to
reflect  changes in the  transfer  pricing  methodology  and the  organizational
changes that have occurred.

<TABLE>
<CAPTION>

                          COMMUNITY BANKING                      COMMERCIAL                      INTERNATIONAL
                           AND INVESTMENT                        FINANCIAL                          BANKING
                           SERVICES GROUP                     SERVICES GROUP                         GROUP
                          -----------------                  -----------------                  ---------------
                           AS OF THE THREE   2005 VS. 2004    AS OF THE THREE   2005 VS. 2004   AS OF THE THREE  2005 VS. 2004
                             MONTHS ENDED      INCREASE         MONTHS ENDED      INCREASE        MONTHS ENDED     INCREASE
                               JUNE 30,       (DECREASE)          JUNE 30,       (DECREASE)         JUNE 30,      (DECREASE)
                          ----------------- ---------------  ----------------- ---------------  --------------- ---------------
                            2004     2005    AMOUNT PERCENT    2004     2005    AMOUNT PERCENT    2004   2005    AMOUNT PERCENT
                          -------- -------- ------- -------  -------- -------- ------- -------  ------- ------- ------- -------
<S>                       <C>      <C>      <C>        <C>   <C>      <C>      <C>        <C>   <C>     <C>     <C>       <C>
RESULTS OF OPERATIONS
  AFTER PERFORMANCE
  CENTER EARNINGS
  (DOLLARS IN THOUSANDS):
  Net interest income..   $179,360 $234,031 $54,671    30%   $162,147 $220,713 $58,566    36%   $ 8,946 $ 7,608 $(1,338)  (15)%
  Noninterest income
    (expense)..........    131,089  134,993   3,904     3      72,638   75,898   3,260     4     22,261  18,319  (3,942)  (18)
                          -------- -------- -------          -------- -------- -------          ------- ------- -------
  Total revenue........    310,449  369,024  58,575    19     234,785  296,611  61,826    26     31,207  25,927  (5,280)  (17)
  Noninterest expense..    226,090  256,022  29,932    13     103,680  116,280  12,600    12     16,957  15,859  (1,098)   (6)
  Credit expense.......      7,847    7,681    (166)   (2)     26,480   21,374  (5,106)  (19)       645     370    (275)  (43)
                          -------- -------- -------          -------- -------- -------          ------- ------- -------
  Income before income
    tax expense........     76,512  105,321  28,809    38     104,625  158,957  54,332    52     13,605   9,698  (3,907)  (29)
  Income tax expense...     29,266   40,285  11,019    38      34,265   53,252  18,987    55      5,204   3,709  (1,495)  (29)
                          -------- -------- -------          -------- -------- -------          ------- ------- -------
  Net income...........   $ 47,246 $ 65,036 $17,790    38    $ 70,360 $105,705 $35,345    50    $ 8,401 $ 5,989 $(2,412)  (29)
                          ======== ======== =======          ======== ======== =======          ======= ======= =======
PERFORMANCE CENTER
  EARNINGS
(DOLLARS IN THOUSANDS):
  Net interest income..   $    156 $     54 $  (102)  (65)   $   (110)    $(81)$    29    26    $    26 $    17 $    (9)  (35)
  Noninterest income...    (19,143) (15,721)  3,422    18      15,271   11,590  (3,681)  (24)       343     568     225    66
  Noninterest expense..     (9,068)  (5,661)  3,407    38       8,015    4,786  (3,229)  (40)        22     247     225 1,023
  Net income (loss)....     (6,143)  (6,187)    (44)   (1)      4,450    4,298    (152)   (3)       215     208      (7)   (3)
  Total loans (dollars
    in millions).......         28       24      (4)  (14)        (46)     (48)     (2)   (4)        --      --      --    na
AVERAGE BALANCES
(DOLLARS IN MILLIONS):
  Total loans(1).......   $ 12,256 $ 15,046 $ 2,790    23    $ 12,140  $15,331 $ 3,191    26    $ 1,820 $ 1,644 $  (176)  (10)
  Total assets.........     13,609   16,470   2,861    21      14,467   18,753   4,286    30      2,254   2,007    (247)  (11)
  Total deposits(1)....     19,332   20,366   1,034     5      14,380   15,527   1,147     8      2,041   1,412    (629)  (31)
FINANCIAL RATIOS:
  Risk adjusted return
    on capital(2)......         26%      34%                       19%      26%                      54%     43%
  Return on average
    assets(2)..........       1.40     1.58                      1.96     2.26                     1.50    1.20
  Efficiency ratio(3)..      72.83    69.38                     44.16    39.20                    54.34   61.17

</TABLE>

<TABLE>
<CAPTION>


                                                                 UNIONBANCAL
                                OTHER                            CORPORATION
                          -----------------                    -----------------
                           AS OF THE THREE   2005 VS. 2004     AS OF THE THREE      2005 VS. 2004
                             MONTHS ENDED      INCREASE         MONTHS ENDED           INCREASE
                               JUNE 30,       (DECREASE)          JUNE 30,            (DECREASE)
                          ----------------- -----------------  -----------------  ------------------
                            2004     2005    AMOUNT   PERCENT    2004    2005      AMOUNT    PERCENT
                          -------- -------- --------  -------  -------- --------  ---------  -------
<S>                       <C>      <C>      <C>         <C>    <C>      <C>       <C>           <C>
RESULTS OF OPERATIONS
  AFTER PERFORMANCE
  CENTER EARNINGS
  (DOLLARS IN THOUSANDS):
  Net interest income..   $ 49,405 $  1,504 $(47,901)   (97)%  $399,858 $463,856  $  63,998     16%
  Noninterest income
   (expense)...........    105,022   (7,860)(112,882)  (107)    331,010  221,350   (109,660)   (33)
                          -------- -------- --------           -------- --------  ---------
  Total revenue........    154,427   (6,356)(160,783)  (104)    730,868  685,206    (45,662)    (6)
  Noninterest expense..     29,675   21,029   (8,646)   (29)    376,402  409,190     32,788      9
  Credit expense.......    (44,972) (40,425)   4,547     10     (10,000) (11,000)    (1,000)   (10)
                          -------- -------- --------           -------- --------  ---------
  Income before income
    tax expense........    169,724   13,040 (156,684)   (92)    364,466  287,016    (77,450)   (21)
  Income tax expense...     64,634    2,588  (62,046)   (96)    133,369   99,834    (33,535)   (25)
                          -------- -------- --------           -------- --------  ---------
  Net income...........   $105,090 $ 10,452 $(94,638)   (90)   $231,097 $187,182  $ (43,915)   (19)
                          ======== ======== ========           ======== ========  =========
PERFORMANCE CENTER
  EARNINGS (DOLLARS IN
  THOUSANDS):
  Net interest income..   $    (72)$     10 $     82    114    $     -- $     --  $      --     na
  Noninterest income...      3,529    3,563       34      1          --       --         --     na
  Noninterest expense..      1,031      628     (403)   (39)         --       --         --     na
  Net income (loss)....      1,478    1,681      203     14          --       --         --     na
  Total loans (dollars
    in millions).......         18       24        6     33          --       --         --     na
AVERAGE BALANCES
(DOLLARS IN MILLIONS):
  Total loans(1).......   $    623 $    203 $   (420)   (67)   $ 26,839 $ 32,224  $   5,385     20
  Total assets.........     14,281   12,235   (2,046)   (14)     44,611   49,465      4,854     11
  Total deposits(1)....      2,057    3,418    1,361     66      37,810   40,723      2,913      8
FINANCIAL RATIOS:
  Risk adjusted return
    on capital(2)......         na       na                          na       na
  Return on average
    assets(2)..........         na       na                        2.08%    1.52%
  Efficiency ratio(3)..         na       na                       51.44    60.59
------------------
<FN>

(1)  Represents  loans and deposits for each business  segment after  allocation
     between the  segments of loans and deposits  originated  in one segment but
     managed by another segment.
(2)  Annualized.
(3)  The efficiency  ratio is noninterest  expense,  excluding  foreclosed asset
     expense (income) and provision for losses on off-balance sheet commitments,
     as a percentage of net interest income and noninterest income.

na = not applicable
</FN>
</TABLE>

                                       46

<PAGE>

<TABLE>
<CAPTION>

                          COMMUNITY BANKING                      COMMERCIAL                      INTERNATIONAL
                           AND INVESTMENT                        FINANCIAL                          BANKING
                           SERVICES GROUP                     SERVICES GROUP                         GROUP
                          -----------------                  -----------------                  ---------------
                            AS OF THE SIX    2005 VS. 2004     AS OF THE SIX    2005 VS. 2004    AS OF THE SIX   2005 VS. 2004
                             MONTHS ENDED      INCREASE         MONTHS ENDED      INCREASE        MONTHS ENDED     INCREASE
                               JUNE 30,       (DECREASE)          JUNE 30,       (DECREASE)         JUNE 30,      (DECREASE)
                          ----------------- ---------------- ----------------- ---------------  --------------- ---------------
                            2004     2005    AMOUNT  PERCENT    2004     2005   AMOUNT PERCENT    2004   2005    AMOUNT PERCENT
                          -------- -------- -------- ------- -------- -------- ------- -------  ------- ------- ------- -------
<S>                       <C>      <C>      <C>          <C> <C>      <C>      <C>        <C>   <C>     <C>     <C>        <C>
RESULTS OF OPERATIONS
  AFTER PERFORMANCE
  CENTER EARNINGS
  (DOLLARS IN
  THOUSANDS):
  Net interest income..   $355,928 $456,579 $100,651     28% $319,636 $418,862 $99,226    31%   $16,521 $15,031 $(1,490)   (9)%
  Noninterest income
    (expense)..........    249,254  269,146   19,892      8   142,266  140,811  (1,455)   (1)    40,450  35,977  (4,473)  (11)
                          -------- -------- --------         -------- -------- -------          ------- ------- -------
  Total revenue........    605,182  725,725  120,543     20   461,902  559,673  97,771    21     56,971  51,008  (5,963)  (10)
  Noninterest expense..    447,646  514,566   66,920     15   208,415  225,356  16,941     8     32,640  31,326  (1,314)   (4)
  Credit expense.......     15,684   16,639      955      6    57,706   45,042 (12,664)  (22)     1,249     806    (443)  (35)
                          -------- -------- --------         -------- -------- -------          ------- ------- -------
  Income before income
    tax expense........    141,852  194,520   52,668     37   195,781  289,275  93,494    48     23,082  18,876  (4,206)  (18)
  Income tax expense...     54,258   74,404   20,146     37    62,526   96,300  33,774    54      8,829   7,220  (1,609)  (18)
                          -------- -------- --------         -------- -------- -------          ------- ------- -------
  Net income...........   $ 87,594 $120,116 $ 32,522     37  $133,255 $192,975 $59,720    45    $14,253 $11,656 $(2,597)  (18)
                          ======== ======== ========         ======== ======== =======          ======= ======= =======
PERFORMANCE CENTER
  EARNINGS
(DOLLARS IN THOUSANDS):
  Net interest income..   $    327 $    152 $   (175)   (54) $   (238)$   (246)$    (8)   (3)   $    35 $    31 $    (4)  (11)
  Noninterest income...    (39,892) (29,809)  10,083     25    31,889   22,014  (9,875)  (31)       616   1,116     500    81
  Noninterest expense..    (20,095) (10,690)   9,405     47    17,591    8,973  (8,618)  (49)        65     451     386   594
  Net income (loss)....    (12,058) (11,731)     327      3     8,755    8,134    (621)   (7)       362     430      68    19
  Total loans (dollars
    in millions).......         28       25       (3)   (11)      (45)     (52)     (7)  (16)        --      --      --    na
AVERAGE BALANCES
(DOLLARS IN MILLIONS):
  Total loans(1).......   $ 12,174 $ 14,782 $  2,608     21  $ 12,112 $ 15,092 $ 2,980    25    $ 1,692 $ 1,636 $   (56)   (3)
  Total assets.........     13,512   16,214    2,702     20    14,330   18,384   4,054    28      2,129   2,012    (117)   (5)
  Total deposits(1)....     19,021   20,354    1,333      7    13,858   15,203   1,345    10      1,853   1,497    (356)  (19)
FINANCIAL RATIOS:
  Risk adjusted return
    on capital(2)......         24%      31%                       18%      24%                      47%    41%
  Return on average
    assets(2)..........       1.30     1.49                      1.87     2.12                     1.35    1.17
  Efficiency ratio(3)..      73.97    70.90                     45.12    40.27                    57.29   61.41

</TABLE>

<TABLE>
<CAPTION>

                                                                  UNIONBANCAL
                                OTHER                             CORPORATION
                          -----------------                    ---------------------
                           AS OF THE SIX     2005 VS. 2004        AS OF THE SIX         2005 VS. 2004
                             MONTHS ENDED      INCREASE           MONTHS ENDED            INCREASE
                               JUNE 30,       (DECREASE)            JUNE 30,             (DECREASE)
                          ----------------- -----------------  ---------------------  ------------------
                            2004     2005     AMOUNT  PERCENT    2004       2005       AMOUNT    PERCENT
                          -------- -------- --------- -------  ---------- ----------  --------   -------
<S>                       <C>      <C>      <C>         <C>    <C>        <C>         <C>           <C>
RESULTS OF OPERATIONS
  AFTER PERFORMANCE
  CENTER EARNINGS
  (DOLLARS IN THOUSANDS):
  Net interest income..   $108,194 $ 14,183 $ (94,011)  (87)%  $  800,279 $  904,655  $104,376      13%
  Noninterest income
   (expense)...........    110,245   (1,823) (112,068) (102)      542,215    444,111   (98,104)    (18)
                          -------- -------- ---------          ---------- ----------  --------
  Total revenue........    218,439   12,360  (206,079)  (94)    1,342,494  1,348,766     6,272       0
  Noninterest expense..     60,807   45,409   (15,398)  (25)      749,508    816,657    67,149       9
  Credit expense.......    (89,639) (81,487)    8,152     9       (15,000)   (19,000)   (4,000)    (27)
                          -------- -------- ---------          ---------- ----------  --------
  Income before income
    tax expense........    247,271   48,438  (198,833)  (80)      607,986    551,109   (56,877)     (9)
  Income tax expense...     93,789    4,026   (89,763)  (96)      219,402    181,950   (37,452)    (17)
                          -------- -------- ---------          ---------- ----------  --------
  Net income...........   $153,482 $ 44,412 $(109,070)  (71)   $  388,584 $  369,159  $(19,425)     (5)
                          ======== ======== =========          ========== ==========  ========
PERFORMANCE CENTER
  EARNINGS (DOLLARS IN
  THOUSANDS):
  Net interest income..   $   (124)$     63 $     187   151    $       -- $       --  $     --      na
  Noninterest income...      7,387    6,679      (708)  (10)           --         --        --      na
  Noninterest expense..      2,439    1,266    (1,173)  (48)           --         --        --      na
  Net income (loss)....      2,941    3,167       226     8            --         --        --      na
  Total loans (dollars
    in millions).......         17       27        10    59            --         --        --      na
AVERAGE BALANCES
(DOLLARS IN MILLIONS):
  Total loans(1).......   $    512 $    256 $    (256)  (50)   $   26,490 $   31,766  $  5,276      20
  Total assets.........     13,860   12,265    (1,595)  (12)       43,831     48,875     5,044      12
  Total deposits(1)....      2,143    3,145     1,002    47        36,875     40,199     3,324       9
FINANCIAL RATIOS:
  Risk adjusted return
    on capital(2)......         na       na                            na         na
  Return on average
    assets(2)..........         na       na                          1.78%      1.52%
  Efficiency ratio(3)..         na       na                         55.72      60.69
----------------
<FN>

(1)  Represents  loans and deposits for each business  segment after  allocation
     between the  segments of loans and deposits  originated  in one segment but
     managed by another segment.
(2)  Annualized.
(3)  The efficiency  ratio is noninterest  expense,  excluding  foreclosed asset
     expense  (income)  and  the  provision  for  losses  on  off-balance  sheet
     commitments, as a percentage of net interest income and noninterest income.

na = not applicable
</FN>
</TABLE>

                                       47

<PAGE>



     COMMUNITY BANKING AND INVESTMENT SERVICES GROUP

     The Community  Banking and Investment  Services  Group  provides  financial
products  including  a set of  credit,  deposit,  trust,  risk  management,  and
insurance products delivered through branches,  relationship  managers,  private
bankers,  trust  administrators,  and insurance  agents to individuals and small
businesses.

     During the second quarter 2005, net income increased by 38 percent over the
same  period in 2004,  reflecting  the  group's  continued  focus on growing the
consumer asset portfolio and attracting retail and small business deposits.

     The group's  strategy is to grow assets  through an expanded small business
sales  force,  increased  emphasis  on real estate  secured  and Small  Business
Administration (SBA) guaranteed loans to small business,  and a stronger network
of residential real estate brokers.  Increasing demand for home equity loans and
more effective  cross-selling  tactics have led to an overall growth in consumer
loans,  despite  run-off of  discontinued  auto  dealer and auto lease  lines of
business. In addition,  the group expects a larger branch network,  created from
new branches and acquired  branches,  to improve growth  prospects when combined
with more robust efforts in the telephone and internet channels.

     Total core deposit growth  demonstrates  the group's  continued  success in
attracting mass retail,  affluent  consumers and small business deposits through
marketing  activities,  relationship  management,  increased and improved  sales
resources, new locations, and new products. These activities,  in the aggregate,
have resulted in a  year-over-year  increase of  approximately 8 percent in core
deposits.  Among the more  successful  marketing  activities has been the "Power
Bank"  network,  in  Fresno,  California  and in the  Central  Coast  region  of
California.  These branches offer an expanded set of service  options,  extended
hours and have been remodeled to improve the customer  experience  with facility
enhancements.  We do  not,  however,  intend  to  expand  the  "Power  Bank"  to
additional  markets  in 2005  until  we  better  understand  the  return  on our
investment  in facilities  and improved  service.  The focus on  enterprise-wide
cross-sell has been  particularly  effective in our affluent  market where a key
strategy of The Private  Bank is to expand its business by  leveraging  existing
Bank client relationships.

     The largest portion of the 3 percent increase in noninterest income was due
to an increase in deposit fees and trust fees,  which were  attributable  to the
recently  acquired  portfolios  from CNA Trust  (renamed  TruSource) and the BTM
Trust  Company,  New York.  Overall,  total revenues for the second quarter 2005
increased by over 19 percent compared to the second quarter 2004.

     The Community  Banking and  Investment  Services Group is comprised of five
major divisions:  Community Banking,  Wealth Management,  Institutional Services
and Asset Management, Consumer Asset Management, and Global Markets.

     COMMUNITY BANKING serves its customers through 314 full-service branches in
California,  4 full-service branches in Oregon and Washington,  and a network of
594 proprietary  ATMs.  Customers may also access our services 24 hours a day by
telephone  or through our WEBSITE at  WWW.UBOC.COM.  In  addition,  the division
offers automated teller and point-of-sale merchant services.

     This division is organized by service  delivery  method,  by markets and by
geography. We serve our customers in the following ways:

     o    through  community   banking  branches,   which  serve  consumers  and
          businesses  with  checking  and deposit  services,  as well as various
          types of consumer financing;

     o    through  access to our internet  banking  services,  which augment our
          physical   delivery   channels  by  providing  an  array  of  customer
          transaction, bill payment and loan payment services;

     o    through  branches  and  business  banking  centers,  which serve small
          businesses with annual sales up to $5 million; and

     o    through  in-store  branches,  which  also  serve  consumers  and small
          businesses.


                                       48

<PAGE>


     WEALTH MANAGEMENT  provides  comprehensive  private banking services to our
affluent clientele.

     o    The Private Bank focuses primarily on delivering financial services to
          high net worth individuals with sophisticated  financial needs as well
          as to  professional  service  firms.  Specific  products  and services
          include  trust and  estate  services,  investment  account  management
          services,  and  deposit  and credit  products.  A key  strategy of The
          Private Bank is to expand its  business by  leveraging  existing  Bank
          client relationships.  Through 14 existing locations, The Private Bank
          relationship   managers  offer  all  of  our  available  products  and
          services.

     INSTITUTIONAL  SERVICES AND ASSET MANAGEMENT provides investment management
and administration services for a broad range of individuals and institutions.

     o    HighMark Capital  Management,  Inc., a registered  investment advisor,
          provides investment  advisory,  administration and support services to
          institutional clients and our proprietary mutual funds, the affiliated
          HighMark Funds. It also provides  advisory services to most Union Bank
          of California,  N.A. trust and agency clients, including corporations,
          pension funds and  individuals.  HighMark Capital  Management,  Inc.'s
          strategy is to increase  assets under  management  by  broadening  its
          client  base and helping to expand the  distribution  of shares of its
          mutual fund clients.

     o    Institutional   Services  provides   custody,   corporate  trust,  and
          retirement plan services.  Custody Services provides both domestic and
          international   safekeeping/settlement   services   in   addition   to
          securities lending.  Corporate Trust acts as trustee for corporate and
          municipal  debt  issues  and  provides  escrow  services.   Retirement
          Services  provides  a  full  range  of  defined  benefit  and  defined
          contribution  administrative  services,  including  trustee  services,
          administration,  investment management, and 401(k) valuation services.
          The  client  base  of  Institutional   Services   includes   financial
          institutions,  corporations,  government agencies,  unions,  insurance
          companies,   mutual  funds,   investment   managers,   and  non-profit
          organizations.  Institutional  Services'  strategy  is to  continue to
          leverage  and  expand  its  position  in  our  target   markets.   The
          acquisition  of CNA Trust  Company  (renamed  TruSource)  expanded our
          retirement processing capability by providing outsourcing services for
          direct distributors of retirement products,  and strengthened capacity
          to support  smaller  plans.  The  acquisition  of the corporate  trust
          portfolio of the BTM Trust  Company,  New York enhanced our capability
          in the  areas of  municipal  and  project  finance  trustee  and agent
          services.

     CONSUMER   ASSET   MANAGEMENT   provides  the   centralized   underwriting,
processing,   servicing,  collection  and  administration  for  consumer  assets
including residential mortgages.

     GLOBAL MARKETS serves our customers with their insurance,  foreign exchange
and interest rate risk management and investment needs. Since the fourth quarter
2004, Global Markets Division has been offering energy derivative contracts,  on
a limited  basis,  to serve our energy  sector client base.  The division  takes
market risk when buying and selling  securities and foreign  exchange  contracts
for its own  account,  but takes no  market  risk when  providing  insurance  or
derivative  contracts,  since the market risk for these  products is offset with
third parties.  Insurance  products are sold through UBOC Insurance Services and
securities are sold through UnionBanc Investment Services LLC, both of which are
subsidiaries of Union Bank of California, N.A.

     Through alliances with other financial institutions,  the Community Banking
and Investment Services Group offers additional  products and services,  such as
credit  cards,  merchant  bank cards,  leasing,  and  asset-based  and leveraged
financing.

     The group  competes  with larger  banks by  attempting  to provide  service
quality superior to that of its major competitors.  The group's primary means of
competing with community  banks include its branch network and its technology to
deliver  banking  services.  The group also offers  convenient  banking hours to


                                       49

<PAGE>


consumers through our drive-through banking locations and selected branches that
are open seven days a week.

     The group  competes  with a number of  commercial  banks,  internet  banks,
savings  associations and credit unions,  as well as more specialized  financial
service  providers  such as investment  brokerage  companies,  consumer  finance
companies, and residential real estate lenders.

     COMMERCIAL FINANCIAL SERVICES GROUP

     The Commercial  Financial  Services Group offers financing,  depository and
cash  management  services  to  middle  market  and large  corporate  businesses
primarily headquartered in the western United States. The group has continued to
focus on specific  geographic  markets  and  industry  segments  such as energy,
entertainment,  and real estate.  Relationship managers provide credit services,
including commercial loans, accounts receivable and inventory financing, project
financing,  lease financing,  trade  financing,  and real estate  financing.  In
addition to credit services, the group offers cash management services delivered
through deposit managers with significant  industry  expertise and experience in
cash  management  solutions for businesses,  correspondent  banks and government
entities.

     In the  second  quarter  2005,  the  increase  in  net  income  was  due to
significant growth in both loans and deposits.  Net interest income increased by
36  percent  due to higher  demand  deposits  and a higher  margin on  deposits,
resulting in a $58 million  improvement over the prior year. Deposit growth came
primarily  from sales  successes  in middle  market,  corporate  and real estate
industries. In addition to new sales, pricing strategies to retain volume helped
to  offset  the  disintermediation   associated  with  a  rising  interest  rate
environment.  Our title/escrow  deposits were not a significant source of growth
in the second quarter.

     Second  quarter  2005 average  loans  increased by 26 percent over the same
period last year.  This was primarily due to the  acquisition of Jackson Federal
and continued  improvement in our approach to the commercial real estate market.
The margin on deposits  improved  through a combination of increased  volume and
higher internal valuation rates.

     The decrease in noninterest income was mainly attributable to lower deposit
fees due to an  increase  in the  earnings  credit  available  to our  wholesale
customers;  lower  credit  card  fees as a result  of the  sale of the  merchant
portfolio;  however,  these  decreases were partly offset by higher  syndication
fees.  The  increase in  noninterest  expense  during the second  quarter  2005,
compared to the second quarter 2004, was mainly due to outside  services expense
from vendor bills paid primarily for title and escrow customers.

     The  group's  initiatives  during 2005 will  continue to include  expanding
wholesale  deposit  activities and increasing  domestic  trade  financing.  Loan
strategies  include  originating,  underwriting  and  syndicating  loans in core
competency  markets,  such as the California  middle-market,  corporate banking,
commercial real estate, energy, entertainment,  equipment leasing and commercial
finance.  The group is  particularly  strong in processing  services,  including
services such as Automated  Clearing  House (ACH),  check  processing,  and cash
vault services.

     The  Commercial  Financial  Services  Group is comprised  of the  following
business units:

     o    the Commercial Banking Division, which serves California middle-market
          and  large  corporate   companies  with  commercial   lending,   trade
          financing, and asset-based loans;

     o    the  Commercial  Deposit  and  Treasury  Management  Division,   which
          provides deposit and cash management  expertise to  middle-market  and
          large   corporate   clients,   government   agencies  and  specialized
          industries.  This division also manages the Bank's web  strategies for
          retail,  small business,  wealth management and commercial clients, as
          well as product development and management for the Bank as a whole.

     o    the Real  Estate  Industries  Division,  which  provides  real  estate
          lending products such as construction loans,  commercial mortgages and
          bridge financing;


                                       50

<PAGE>


     o    the  Energy  Capital  Services  Division,   which  provides  corporate
          financing and project  financing to oil and gas companies,  as well as
          power and utility companies, nationwide; and

     o    the Corporate  Capital Markets Division,  which provides  financing to
          middle-market and large corporate clients in their defined  industries
          and geographic markets,  together with limited merchant and investment
          banking related products and services.

     The group's main strategy is to target  industries  and companies for which
the  group  can  reasonably  expect  to be one of a  customer's  primary  banks.
Consistent  with its strategy,  the group  attempts to serve a large part of its
targeted  customers'  credit and depository needs. The group competes with other
banks primarily on the basis of the quality of its  relationship  managers,  the
level of industry expertise,  the delivery of quality customer service,  and its
reputation as a "business bank". The group also competes with a variety of other
financial services companies.  Competitors include other major California banks,
as well as regional,  national and international  banks. In addition,  the group
competes with investment banks, commercial finance companies, leasing companies,
and insurance companies.

     INTERNATIONAL BANKING GROUP

     Our   International   Banking   Group   primarily   focuses  on   providing
correspondent  banking  and trade  finance  related  products  and  services  to
international financial institutions worldwide. This focus includes products and
services  such as letters of credit,  international  payments,  collections  and
providing  short-term  financing.  The majority of the revenue generated is from
financial institutions domiciled outside the U.S.

     The group's business revolves around providing international  correspondent
banking services and short-term  financing,  mostly to  international  financial
institutions.  Net interest  income in the second  quarter 2005  declined due to
lower demand for loans and  tightening  spreads in our major  markets as well as
our  decision to exit from the Russian and former  Soviet bloc  markets in 2004.
Lower sweep balances also  contributed to the lower net interest  income,  again
due to the  decision  to exit  the  Russian  and  former  Soviet  bloc  markets.
Noninterest  income declined mainly due to a $3.9 million insurance  recovery in
the second quarter 2004 relating to the World Trade Center disaster. Noninterest
expense declined  primarily due to reduced overhead  allocations  based on lower
asset balances.

     The  group  has a long  history  of  providing  correspondent  banking  and
trade-related products and services to international financial institutions.  We
believe  the  group  continues  to  achieve  strong  customer   loyalty  in  the
correspondent  banking  markets,  but there are certain  trends in these markets
that could  materially  and  adversely  affect our  international  correspondent
banking business.  These trends include heightened regulatory burdens related to
the Bank Secrecy Act and other anti-money  laundering laws and  regulations,  as
well  as  consolidation  of  banks  in  key  international  markets,   increased
technological  investments and  competition  from major banks that are active in
international   correspondent   banking.   The   International   Banking  Group,
headquartered in San Francisco, also maintains offices in Asia and Latin America
and an international banking subsidiary in New York.

     OTHER

     "Other" includes the following items:

     o    corporate activities that are not directly  attributable to one of the
          three major  business  units.  Included in this  category  are certain
          other  nonrecurring items such as the results of operations of certain
          parent company non-bank  subsidiaries and the elimination of the fully
          taxable-equivalent basis amount;

     o    the  adjustment  between  the  credit  expense  under  RAROC  and  the
          provision for credit losses under US GAAP and earnings associated with
          unallocated equity capital;


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     o    the adjustment  between the tax expense calculated under RAROC using a
          tax rate of 38.25 percent and our effective tax rates;

     o    the Pacific Rim Corporate  Group,  with assets of $215 million at June
          30, 2005,  which  offers a range of credit,  deposit,  and  investment
          management  products and services to companies in the U.S.,  which are
          affiliated with companies headquartered in Japan;

     o    Corporate  Treasury,  which  is  responsible  for our  ALM,  wholesale
          funding, and the investment and derivatives portfolios. These treasury
          management  activities are carried out to counter-balance the residual
          risk  positions  of our core  balance  sheet and to manage those risks
          within conservative  guidelines.  (For additional discussion regarding
          these risk management  activities,  see  "Quantitative and Qualitative
          Disclosures  About Market Risk.") The funds transfer  pricing  results
          for the entire company, which allocates to the other business segments
          their  cost of funds on all asset  categories  and credit for funds on
          all liability categories; and

     o    the residual costs of support groups.

     The second  quarter 2005  financial  results were impacted by the following
factors:

     o    Credit expense  (income) of ($40.4)  million was due to the difference
          between  the $11.0  million  reversal  of  provision  for loan  losses
          calculated  under our US GAAP  methodology  and the $29.4  million  in
          expected losses for the reportable  business segments,  which utilizes
          the RAROC methodology;

     o    Net interest  income  included the result of  differences  between the
          credit for equity for the reportable  segments under RAROC and the net
          interest  income  earned  by  UnionBanCal  Corporation,  a credit  for
          deposits in the  Pacific  Rim  Corporate  Group and  transfer  pricing
          results.  Net interest  income  declined $47.9 million  primarily as a
          result of a decrease  in income from ALM  derivatives  hedges and from
          the net impact of changes in transfer  pricing rates over prior period
          as market rates increased;

     o    Noninterest  income of ($7.9) million included a $13.3 million loss on
          the sale of $475  million of  securities  in  support  of loan  growth
          during the quarter; and

     o    Noninterest expense of $21.0 million declined partially as a result of
          lower litigation expenses and refinements in our overhead  allocations
          in the second quarter of 2005.

     The second  quarter 2004  financial  results were impacted by the following
factors:

     o    Credit expense  (income) of ($45.0)  million was due to the difference
          between  the $10.0  million  reversal  in  provision  for loan  losses
          calculated  under our US GAAP  methodology  and the $35.0  million  in
          expected losses for the reportable  business segments,  which utilizes
          the RAROC methodology;

     o    Net interest  income is the result of  differences  between the credit
          for  equity  for  the  reportable  segments  under  RAROC  and the net
          interest  income  earned  by  UnionBanCal  Corporation,  a credit  for
          deposits in the Pacific Rim Corporate  Group and net transfer  pricing
          results reported by Corporate Treasury;

     o    Noninterest  income of $105.0 million,  which included a $93.0 million
          gain on the sale of our merchant  card  portfolio  and an $8.5 million
          gain on the sale of real property; and

     o    Noninterest expense of $29.7 million.

REGULATORY MATTERS

     On October 18, 2004, Union Bank of California  International entered into a
written  agreement  with the Federal  Reserve Bank of New York relating to Union
Bank of  California  International's  Bank Secrecy


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<PAGE>


Act  controls  and  processes.   Union  Bank  of  California   International  is
wholly-owned  by  Union  Bank of  California,  N.A.,  which is  wholly-owned  by
UnionBanCal Corporation. Union Bank of California International is headquartered
in New York City and,  as an Edge Act  subsidiary,  is  limited to  engaging  in
international  banking activities.  On March 23, 2005, Union Bank of California,
N.A., received from the Office of the Comptroller of the Currency, its principal
regulator,  a  memorandum  of  understanding,   which  requires  Union  Bank  of
California,  N.A. to strengthen its Bank Secrecy Act and  anti-money  laundering
controls and  processes.  Management is committed to resolving the issues raised
by the  regulators  and is  continuing  to take action aimed at resolving  these
matters.

     These regulatory matters may adversely affect UnionBanCal Corporation's and
Union Bank of  California,  N.A.'s  ability to obtain  regulatory  approvals for
future  initiatives  requiring  regulatory  approval,   including  acquisitions.
However,  neither this effect,  the  regulatory  agreements,  nor the  financial
impact of enhanced  Bank  Secrecy Act and  anti-money  laundering  controls  and
processes,  are  expected  to have a material  adverse  impact on the  financial
condition  or  results  of  operations  of Union  Bank of  California,  N.A.  or
UnionBanCal Corporation.

FACTORS THAT MAY AFFECT FUTURE RESULTS

     This document includes forward-looking information, which is subject to the
"safe harbor"  created by section 27A of the Securities Act of 1933, as amended,
and section 21E of the Securities  Exchange Act of 1934, as amended. We may make
forward-looking  statements  in our  Securities  and Exchange  Commission  (SEC)
filings,  press  releases,  news  articles,  conference  calls with analysts and
stockholders  and when we are  speaking  on behalf of  UnionBanCal  Corporation.
Forward-looking statements can be identified by the fact that they do not relate
strictly  to  historical  or  current  facts.  Often,  they  include  the  words
"believe,"  "expect,"  "target,"  "anticipate,"  "intend,"  "plan,"  "estimate,"
"potential,"  "project," or words of similar  meaning,  or future or conditional
verbs  such  as   "will,"   "would,"   "should,"   "could,"   or  "may."   These
forward-looking  statements are intended to provide  investors  with  additional
information  with  which they may  assess  our  future  potential.  All of these
forward-looking  statements are based on assumptions  about an uncertain  future
and are based on information available to us at the date of these statements. We
do  not  undertake  to  update  forward-looking  statements  to  reflect  facts,
circumstances,   assumptions   or  events   that   occur   after  the  date  the
forward-looking statements are made.

     In this document,  for example, we make forward-looking  statements,  which
discuss our expectations about:

     o    Pending legal actions

     o    Credit quality and provision for credit losses

     o    Net interest income including income from derivative hedges

     o    The impact of increases in interest rates and growth in our commercial
          loan portfolio on our net interest margin

     o    The impact of strategic investments on our business

     o    The unallocated portion of our allowances for credit losses

     o    Our sensitivity to changes in interest rates

     o    The asset sensitivity of our balance sheet

     o    Increased regulatory controls and processes regarding Bank Secrecy Act
          and anti-money laundering matters

     o    Trends in  international  markets,  which could  adversely  affect our
          international correspondent banking business


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<PAGE>


     o    Future legislative and regulatory developments

     o    The  costs and  effects  of  litigation,  investigations,  or  similar
          matters, or adverse facts and developments related thereto

     o    Decisions  to downsize,  sell or close units or  otherwise  change the
          business mix of any of the company

     o    Potential dividend restrictions

     o    Integration of acquired companies

     There are numerous risks and uncertainties that could and will cause actual
results  to  differ  materially  from  those  discussed  in our  forward-looking
statements.  Many of these  factors are beyond our ability to control or predict
and  could  have a  material  adverse  effect  on  our  stock  price,  financial
condition, and results of operations or prospects.  Such risks and uncertainties
include,  but are not limited to those listed  below in  "Industry  Factors" and
"Company Factors."

     Readers  of  this  document  should  not  rely  solely  on  forward-looking
information and should consider all uncertainties and risks disclosed throughout
this  document and in our other reports to the SEC,  including,  but not limited
to, those discussed  below. Any factor described in this report could by itself,
or  together  with one or more other  factors,  adversely  affect our  business,
future prospects,  results of operations or financial condition.  There are also
other  factors that we have not  described in this report and our other  reports
that could cause our results to differ from our expectations.

INDUSTRY FACTORS

FLUCTUATIONS IN INTEREST RATES COULD ADVERSELY AFFECT OUR BUSINESS

     Significant  increases in market  interest rates, or the perception that an
increase may occur,  could  adversely  affect both our ability to originate  new
loans and our ability to grow.  Conversely,  decreases  in interest  rates could
result in an  acceleration of loan  prepayments.  An increase in market interest
rates could also adversely affect the ability of our floating-rate  borrowers to
meet their  higher  payment  obligations.  If this  occurred,  it could cause an
increase in nonperforming  assets and charge-offs,  which could adversely affect
our business.

     FLUCTUATIONS IN INTEREST RATES COULD ADVERSELY AFFECT OUR MARGIN SPREAD

     Changes in market interest  rates,  including  changes in the  relationship
between  short-term and long-term  market  interest  rates or between  different
interest rate indices,  can impact our margin  spread,  that is, the  difference
between the interest rates we charge on interest earning assets,  such as loans,
and the interest rates we pay on interest bearing liabilities,  such as deposits
or other  borrowings.  The impact  could  result in a decrease  in our  interest
income relative to interest expense.

     THE  CONTINUING  WAR ON TERRORISM  COULD  ADVERSELY  AFFECT U.S. AND GLOBAL
     ECONOMIC CONDITIONS

     Acts or  threats  of  terrorism  and  actions  taken by the  U.S.  or other
governments  as a result of such acts or threats may result in a  disruption  of
U.S. and global  economic and financial  conditions and could  adversely  affect
business  and  economic  and  financial  conditions  in the  U.S.  and  globally
generally and in our principal markets.



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<PAGE>


     SUBSTANTIAL COMPETITION COULD ADVERSELY AFFECT US

     Banking is a highly  competitive  business.  We compete  actively for loan,
deposit,  and other  financial  services  business  in  California,  Oregon  and
Washington, as well as nationally and internationally. Our competitors include a
large number of state and national banks, thrift institutions, credit unions and
major  foreign-affiliated  or  foreign  banks,  as well as  many  financial  and
nonfinancial firms that offer services similar to those offered by us, including
many large securities  firms.  Some of our competitors are community or regional
banks that have strong local market positions.  Other competitors  include large
financial  institutions that have substantial capital,  technology and marketing
resources that are well in excess of ours. Such large financial institutions may
have  greater  access to capital at a lower  cost than us,  which may  adversely
affect our ability to compete effectively.

     ADVERSE EFFECTS OF, OR CHANGES IN, BANKING OR OTHER LAWS AND REGULATIONS OR
     GOVERNMENTAL FISCAL OR MONETARY POLICIES COULD ADVERSELY AFFECT US

     We are subject to significant federal and state regulation and supervision,
which is primarily  for the benefit and  protection of our customers and not for
the benefit of investors. In the past, our business has been materially affected
by these regulations. This will likely continue in the future. Laws, regulations
or policies,  including  accounting  standards  and  interpretations,  currently
affecting us and our subsidiaries may change at any time. Regulatory authorities
may  also  change  their  interpretation  of  these  statutes  and  regulations.
Therefore,  our business may be  adversely  affected by future  changes in laws,
regulations,  policies or interpretations or regulatory approaches to compliance
and enforcement.  Additionally,  our international  activities may be subject to
the  laws  and  regulations  of the  jurisdiction  in  which  business  is being
conducted.  International  laws,  regulations and policies  affecting us and our
subsidiaries  may change at any time and affect our business  opportunities  and
competitiveness  in these  jurisdictions.  Due to The Bank of  Tokyo-Mitsubishi,
Ltd.'s  controlling  ownership of us, laws,  regulations and policies adopted or
enforced by the Government of Japan and the Federal  Reserve Board may adversely
affect our  activities  and  investments  and those of our  subsidiaries  in the
future.

     Additionally,  our  business  is affected  significantly  by the fiscal and
monetary  policies  of the U.S.  federal  government  and its  agencies.  We are
particularly  affected  by the  policies  of the Federal  Reserve  Board,  which
regulates the supply of money and credit in the U.S. Under long-standing  policy
of the Federal  Reserve  Board,  a bank holding  company is expected to act as a
source of  financial  strength  for its  subsidiary  banks.  As a result of that
policy,  we may be  required  to commit  financial  and other  resources  to our
subsidiary bank in  circumstances  where we might not otherwise do so. Among the
instruments of monetary  policy  available to the Federal  Reserve Board are (a)
conducting open market operations in U.S.  government  securities,  (b) changing
the discount rates on borrowings by depository institutions, and (c) imposing or
changing  reserve  requirements  against  certain  borrowings by banks and their
affiliates.  These  methods  are used in varying  degrees  and  combinations  to
directly  affect the  availability  of bank loans and  deposits,  as well as the
interest  rates  charged  on loans and paid on  deposits.  The  policies  of the
Federal  Reserve Board may have a material  effect on our  business,  prospects,
results of operations and financial condition.

     Refer to "Supervision and Regulation" in our Annual Report on Form 10-K for
the year ended  December 31, 2004,  and  "Regulatory  Matters" for discussion of
other laws and regulations,  including the Bank Secrecy Act and other anti-money
laundering laws and regulations that may have a material effect on our business,
prospects, results of operations and financial condition.

     CHANGES IN  ACCOUNTING  STANDARDS  COULD  MATERIALLY  IMPACT OUR  FINANCIAL
     STATEMENTS

     From time to time the Financial  Accounting  Standards  Board,  the SEC and
bank  regulators  change the financial  accounting and reporting  standards that
govern the  preparation of our financial  statements.  These changes can be very
difficult  to  predict  and can  materially  impact how we record and report our


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<PAGE>


financial  condition  and  results of  operations.  In some  cases,  we could be
required  to apply a new or revised  standard  retroactively,  resulting  in our
restating prior period financial statements.

     THERE ARE AN INCREASING NUMBER OF NON-BANK COMPETITORS  PROVIDING FINANCIAL
     SERVICES

     Technology  and  other  changes  increasingly  allow  parties  to  complete
financial  transactions  electronically,  and in many cases,  without banks. For
example,  consumers  can pay bills and  transfer  funds over the internet and by
telephone  without banks.  Many non-bank  financial service providers have lower
overhead costs and are subject to fewer regulatory constraints.  If consumers do
not use banks to complete their  financial  transactions,  we could  potentially
lose fee income, deposits and income generated from those deposits.

COMPANY FACTORS

     ADVERSE CALIFORNIA ECONOMIC CONDITIONS COULD ADVERSELY AFFECT OUR BUSINESS

     A substantial majority of our assets, deposits and fee income are generated
in California.  As a result, poor economic conditions in California may cause us
to incur losses  associated  with higher default rates and decreased  collateral
values in our loan portfolio.  Economic  conditions in California are subject to
various uncertainties at this time, including the pace and scope of the recovery
in the technology  sector,  and the  California  state  government's  continuing
budgetary and fiscal difficulties. If economic conditions in California decline,
we expect that our level of problem  assets could increase and our prospects for
growth  could be  impaired.  The State of  California  continues  to face fiscal
challenges,  the  long-term  impact of which on the  State's  economy  cannot be
predicted with any certainty.

     ADVERSE  ECONOMIC  FACTORS  AFFECTING  CERTAIN  INDUSTRIES  WE SERVE  COULD
     ADVERSELY AFFECT OUR BUSINESS

     We are subject to certain industry-specific  economic factors. For example,
a significant  and increasing  portion of our total loan portfolio is related to
residential real estate,  especially in California.  Accordingly,  a downturn in
the real  estate and  housing  industries  in  California  could have an adverse
effect on our  operations  and the quality of our real  estate  loan  portfolio.
Increases in residential mortgage loan interest rates could also have an adverse
effect on our  operations  by  depressing  new mortgage  loan  originations.  We
provide  financing to  businesses  in a number of other  industries  that may be
particularly  vulnerable to  industry-specific  economic factors,  including the
commercial real estate industry, the communications / media industry, the retail
industry,  the power industry and the technology  industry.  Recent increases in
fuel prices and energy costs have  adversely  affected  businesses in several of
these  industries.  Industry-specific  risks are  beyond our  control  and could
adversely affect our portfolio of loans, potentially resulting in an increase in
nonperforming  loans or charge-offs  and a slowing of growth or reduction in our
loan portfolio.

     WE ARE NOT ABLE TO OFFER ALL OF THE  FINANCIAL  SERVICES  AND PRODUCTS OF A
     FINANCIAL HOLDING COMPANY

     Banks,  securities  firms,  and  insurance  companies  can now combine as a
"financial holding company." Financial holding companies can offer virtually any
type of financial service, including banking, securities underwriting, insurance
(both agency and  underwriting),  and merchant banking.  Many of our competitors
have  elected  to become  financial  holding  companies.  Recently,  a number of
foreign banks have acquired  financial  holding  companies in the U.S.,  further
increasing   competition   in  the  U.S.   market.   Under  current   regulatory
interpretations,  Mitsubishi  Tokyo Financial  Group,  Inc. would be required to
make a financial  holding company  election in order for us to have the benefits
of their status.  We do not expect that Mitsubishi Tokyo Financial  Group,  Inc.
will make such an election in the near future.





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<PAGE>


     OUR STOCKHOLDER VOTES ARE CONTROLLED BY THE BANK OF TOKYO-MITSUBISHI, LTD.;
     OUR INTERESTS AND THOSE OF OUR MINORITY STOCKHOLDERS MAY NOT BE THE SAME AS
     THOSE OF THE BANK OF TOKYO-MITSUBISHI, LTD.

     The Bank of Tokyo-Mitsubishi, Ltd., a wholly-owned subsidiary of Mitsubishi
Tokyo Financial  Group,  Inc., owns a majority of the outstanding  shares of our
common stock. As a result, The Bank of  Tokyo-Mitsubishi,  Ltd. can elect all of
our  directors and can control the vote on all matters,  including:  approval of
mergers or other business  combinations;  a sale of all or substantially  all of
our assets;  issuance of any additional common stock or other equity securities;
incurrence of debt other than in the ordinary course of business;  the selection
and tenure of our Chief Executive Officer;  payment of dividends with respect to
our common stock or other  equity  securities;  and other  matters that might be
favorable to The Bank of Tokyo-Mitsubishi,  Ltd. A majority of our directors are
independent  of The  Bank of  Tokyo-Mitsubishi,  Ltd.  and are not  officers  or
employees of  UnionBanCal  Corporation or any of our  affiliates,  including The
Bank of Tokyo-Mitsubishi, Ltd. However, because of The Bank of Tokyo-Mitsubishi,
Ltd.'s control over the election of our directors,  we could designate ourselves
as a  "controlled  company"  under the New York Stock  Exchange  Rules and could
change the  composition  of our Board of  Directors  so that the Board would not
have a majority of independent directors.  The Bank of Tokyo-Mitsubishi,  Ltd.'s
ability  to  prevent an  unsolicited  bid for us or any other  change in control
could also have an  adverse  effect on the  market  price for our common  stock.

     POSSIBLE FUTURE SALES OF OUR SHARES BY THE BANK OF  TOKYO-MITSUBISHI,  LTD.
     COULD ADVERSELY AFFECT THE MARKET FOR OUR STOCK

     The Bank of  Tokyo-Mitsubishi,  Ltd. may sell shares of our common stock in
compliance  with  the  federal  securities  laws.  By  virtue  of  The  Bank  of
Tokyo-Mitsubishi,  Ltd.'s current  control of us, The Bank of  Tokyo-Mitsubishi,
Ltd.  could  sell large  amounts of shares of our common  stock by causing us to
file a registration statement that would allow it to sell shares more easily. In
addition,  The Bank of  Tokyo-Mitsubishi,  Ltd.  could sell shares of our common
stock without  registration under certain  circumstances,  such as in a "private
placement."  Although we can make no prediction  as to the effect,  if any, that
such  sales  would  have on the  market  price  of our  common  stock,  sales of
substantial amounts of our common stock, or the perception that such sales could
occur,  could adversely affect the market price of our common stock. If The Bank
of  Tokyo-Mitsubishi,  Ltd.  sells or transfers  shares of our common stock as a
block, another person or entity could become our controlling stockholder.

     THE BANK OF TOKYO-MITSUBISHI,  LTD.'S AND MITSUBISHI TOKYO FINANCIAL GROUP,
     INC.'S FINANCIAL CONDITION COULD ADVERSELY AFFECT OUR OPERATIONS

     We fund our operations independently of The Bank of Tokyo-Mitsubishi,  Ltd.
and  Mitsubishi  Tokyo  Financial  Group,  Inc.  and believe our business is not
necessarily  closely  related  to  the  business  or  outlook  of  The  Bank  of
Tokyo-Mitsubishi,  Ltd. or Mitsubishi Tokyo Financial Group, Inc.  However,  The
Bank of  Tokyo-Mitsubishi,  Ltd.'s and Mitsubishi Tokyo Financial Group,  Inc.'s
credit ratings may affect our credit ratings. The Bank of Tokyo-Mitsubishi, Ltd.
and  Mitsubishi  Tokyo  Financial  Group,  Inc. are also  subject to  regulatory
oversight and review by Japanese and U.S. regulatory  authorities.  Our business
operations  and  expansion  plans could be  negatively  affected  by  regulatory
concerns related to the Japanese financial system, The Bank of Tokyo-Mitsubishi,
Ltd.  or  Mitsubishi  Tokyo  Financial  Group,   Inc.,  and  other  developments
concerning  The Bank of  Tokyo-Mitsubishi,  Ltd. or Mitsubishi  Tokyo  Financial
Group,  Inc.,  including the proposed merger with UFJ Holdings,  Inc., which may
result in capital constraints as well as additional Japanese and U.S. regulatory
constraints.

     POTENTIAL  CONFLICTS OF INTEREST  WITH THE BANK OF  TOKYO-MITSUBISHI,  LTD.
     COULD ADVERSELY AFFECT US

     The Bank of  Tokyo-Mitsubishi,  Ltd.'s  view of  possible  new  businesses,
strategies,  acquisitions,  divestitures  or other  initiatives  may differ from
ours. This may delay or hinder us from pursuing such initiatives.


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<PAGE>


     Also,  as  part  of  The  Bank  of  Tokyo-Mitsubishi,  Ltd.'s  normal  risk
management processes,  The Bank of Tokyo-Mitsubishi,  Ltd. manages global credit
and other types of exposures and concentrations on an aggregate basis, including
exposures and concentrations at UnionBanCal  Corporation.  Therefore, at certain
levels or in certain  circumstances,  our ability to approve  certain credits or
other  banking  transactions  and  categories  of  customers  is  subject to the
concurrence of The Bank of  Tokyo-Mitsubishi,  Ltd. We may wish to extend credit
or  furnish  other  banking  services  to the  same  customers  as The  Bank  of
Tokyo-Mitsubishi,  Ltd. Our ability to do so may be limited for various reasons,
including The Bank of Tokyo-Mitsubishi,  Ltd.'s aggregate exposure and marketing
policies.

     Certain  directors'  and  officers'  ownership  interests  in The  Bank  of
Tokyo-Mitsubishi,  Ltd.'s  common  stock or service as a director  or officer or
other employee of both us and The Bank of Tokyo-Mitsubishi, Ltd. could create or
appear to create  potential  conflicts of interest,  especially since both of us
compete in U.S. banking markets.

     RESTRICTIONS  ON  DIVIDENDS  AND OTHER  DISTRIBUTIONS  COULD LIMIT  AMOUNTS
     PAYABLE TO US

     As a holding  company,  a  substantial  portion of our cash flow  typically
comes  from  dividends  our bank and  nonbank  subsidiaries  pay to us.  Various
statutory  provisions  restrict the amount of dividends our subsidiaries can pay
to us without regulatory approval.  In addition, if any of our subsidiaries were
to  liquidate,   that  subsidiary's   creditors  will  be  entitled  to  receive
distributions from the assets of that subsidiary to satisfy their claims against
it  before  we, as a holder of an equity  interest  in the  subsidiary,  will be
entitled to receive any of the assets of the subsidiary.

     OUR ABILITY TO MAKE  ACQUISITIONS IS SUBJECT TO REGULATORY  CONSTRAINTS AND
     RISKS   ASSOCIATED   WITH  POTENTIAL   ACQUISITIONS   OR   DIVESTITURES  OR
     RESTRUCTURINGS MAY ADVERSELY AFFECT US

     Our ability to obtain  regulatory  approval of  acquisitions  is subject to
constraints  related to the Bank Secrecy Act, as described in  "Supervision  and
Regulation"  in our Annual  Report on Form 10-K for the year ended  December 31,
2004,  and above in  "Regulatory  Matters."  Subject  to our  ability to address
successfully  these  regulatory  concerns,  we may seek to  acquire or invest in
financial and non-financial companies that complement our business. There can be
no assurance  that we will be successful in completing  any such  acquisition or
investment  as this  will  depend  on the  availability  of  prospective  target
opportunities  at valuation  levels we find  attractive and the  competition for
such opportunities from other parties. In addition,  we continue to evaluate the
performance  of all of our businesses and business lines and may sell a business
or business line. Any acquisitions, divestitures or restructurings may result in
the issuance of potentially dilutive equity securities,  significant write-offs,
including  those  related to goodwill and other  intangible  assets,  and/or the
incurrence  of debt,  any of which could have a material  adverse  effect on our
business,   results  of  operations  and  financial   condition.   Acquisitions,
divestitures or restructurings could involve numerous additional risks including
difficulties  in  obtaining  any  required  regulatory   approvals  and  in  the
assimilation or separation of operations,  services, products and personnel, the
diversion of management's  attention from other business  concerns,  higher than
expected  deposit  attrition  (run-off),  divestitures  required  by  regulatory
authorities,  the  disruption  of our business,  and the  potential  loss of key
employees.  There can be no assurance  that we will be  successful in addressing
these or any other significant risks encountered.

     PRIVACY RESTRICTIONS COULD ADVERSELY AFFECT OUR BUSINESS

     Our business  model  relies,  in part,  upon  cross-marketing  the services
offered by us and our  subsidiaries  to our  customers.  Laws that  restrict our
ability to share information  about customers within our corporate  organization
could  adversely  affect our  business,  results  of  operations  and  financial
condition.


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<PAGE>


     WE RELY ON THIRD PARTIES FOR IMPORTANT PRODUCTS AND SERVICES

     Third party vendors  provide key components of our business  infrastructure
such as internet connections, network access and mutual fund distribution. While
we have selected  these third party vendors  carefully,  we do not control their
actions.  Any problems  caused by these third parties,  including as a result of
their not providing us their services for any reason or their  performing  their
services  poorly,  could  adversely  affect our ability to deliver  products and
services to our customers and otherwise to conduct our business. Replacing these
third party vendors could also entail significant delay and expense.

     SIGNIFICANT  LEGAL  ACTIONS  COULD  SUBJECT  US  TO  SUBSTANTIAL  UNINSURED
     LIABILITIES

     We are from time to time subject to claims related to our operations. These
claims and legal actions, including supervisory actions by our regulators, could
involve  large  monetary  claims  and  significant  defense  costs.  To  protect
ourselves  from the cost of these  claims,  we  maintain  insurance  coverage in
amounts and with deductibles that we believe are appropriate for our operations.
However,  our insurance coverage may not cover all claims against us or continue
to be available to us at a reasonable  cost.  As a result,  we may be exposed to
substantial  uninsured  liabilities,  which could adversely affect our business,
prospects, results of operations and financial condition.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     A discussion  of our market risk exposure is  incorporated  by reference to
Part I, Item 2 of this document under the captions "Quantitative and Qualitative
Disclosures  About Market Risk,"  "Liquidity Risk," and "Factors That May Affect
Future Results."

ITEM 4. CONTROLS AND PROCEDURES

     Our  Chief  Executive  Officer  (principal  executive  officer)  and  Chief
Financial Officer  (principal  financial officer) have concluded that the design
and operation of our disclosure controls and procedures are effective as of June
30,  2005.  This  conclusion  is  based on an  evaluation  conducted  under  the
supervision and with the  participation of management.  Disclosure  controls and
procedures  are those  controls and  procedures  which  ensure that  information
required to be  disclosed  in this filing is  accumulated  and  communicated  to
management  and is  recorded,  processed,  summarized  and  reported in a timely
manner and in  accordance  with  Securities  and Exchange  Commission  rules and
regulations.

     During  the  quarter  ended  June 30,  2005,  there  were no changes in our
internal  controls over financial  reporting that  materially  affected,  or are
reasonably  likely to materially  affect,  our internal  controls over financial
reporting.






                                       59

<PAGE>


                           PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

     We are subject to various  pending and threatened  legal actions that arise
in the normal  course of  business.  We maintain  reserves for losses from legal
actions that are both probable and estimable.

     Grafton  Partners  LP v.  Union  Bank of  California  is pending in Alameda
County  Superior  Court (filed  March 12,  2003).  That suit  concerns a "Ponzi"
scheme perpetrated by PinnFund, USA, located in San Diego,  California.  We have
reached an agreement in principle to resolve the Grafton matter, which calls for
a payment of $22 million,  $15.8  million of which will be paid by the Company's
insurance  carriers.  This  agreement  in  principle  is in the process of being
documented,  and will thereafter require court approval. The disposition of this
claim, on the basis described above,  assuming that the settlement becomes final
and approved, will not have a material adverse effect on our financial condition
or results of operations.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

     REPURCHASES OF EQUITY SECURITIES

     The following  table presents  repurchases  by us of our equity  securities
during the second quarter 2005:

<TABLE>
<CAPTION>

                                                                   TOTAL NUMBER OF SHARES    APPROXIMATE DOLLAR VALUE
                                                                    PURCHASED AS PART OF          OF SHARES THAT
                            TOTAL NUMBER OF   AVERAGE PRICE PAID     PUBLICLY ANNOUNCED         MAY YET BE PURCHASED
PERIOD                     SHARES PURCHASED       PER SHARE               PROGRAMS             UNDER THE PROGRAMS
-------------------------- ----------------   ------------------   ----------------------    ------------------------
<S>                              <C>               <C>                     <C>                   <C>
APRIL 2005
(April 25 - 29, 2005).....       227,000           $60.33                  227,000               $237,600,475(1)
MAY 2005
(May 2 - 31, 2005)........       615,000           $62.34                  615,000               $199,258,735
JUNE 2005
(June 1 - 30, 2005).......       579,100           $64.20                  579,100               $162,078,928(2)
                               ---------                                 ---------
   TOTAL..................     1,421,100           $62.78                1,421,100
---------------
<FN>

(1)  On April 21, 2005, UnionBanCal Corporation announced the Board of Directors
     authorization  of an  additional  $200 million  repurchase of the Company's
     common stock.
(2)  In the second quarter of 2005,  UnionBanCal  Corporation used the remaining
     $51.3 million from the $200 million  repurchase  program announced on April
     28,  2004  and  $37.9  million  from the $200  million  repurchase  program
     announced April 21, 2005.

</FN>
</TABLE>


ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     For information regarding matters submitted to a vote at the Annual Meeting
of  Stockholders  on April 27,  2005,  see Part II, Item 4 of our Report on Form
10-Q for the quarter ended March 31, 2005, incorporated by reference herein.








                                       60

<PAGE>

<TABLE>
<CAPTION>

ITEM 6. EXHIBITS

      NO.                             DESCRIPTION
     ----   --------------------------------------------------------------------
<S>  <C>                                                                      <C>
     10.1   Philip B. Flynn Amendment of Employment  Agreement (Effective May 1,
            2005)(1)

     10.2   David I. Matson Amendment of Employment  Agreement (Effective May 1,
            2005)(1)

     10.3   Year 2000 UnionBanCal Corporation Management Stock Plan(2)

     31.1   Certification of the Chief Executive Officer pursuant to Section 302
            of the Sarbanes-Oxley Act of 2002(1)

     31.2   Certification of the Chief Financial Officer pursuant to Section 302
            of the Sarbanes-Oxley Act of 2002(1)

     32.1   Certification  of the Chief Executive  Officer pursuant to 18 U.S.C.
            Section   1350,   as  adopted   pursuant   to  Section  906  of  the
            Sarbanes-Oxley Act of 2002(1)

     32.2   Certification  of the Chief Financial  Officer pursuant to 18 U.S.C.
            Section   1350,   as  adopted   pursuant   to  Section  906  of  the
            Sarbanes-Oxley Act of 2002(1)

-------------------------
<FN>

(1)  Filed herewith.

(2)  Filed  as  Appendix  A to  UnionBanCal  Corporation's  Proxy  Statement  on
     Schedule 14A for its 2005 Annual Meeting of Stockholders  and  incorporated
     by reference herein.
</FN>
</TABLE>
















                                       61

<PAGE>

                                   SIGNATURES

     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.

                                        UNIONBANCAL CORPORATION
                                              (Registrant)




Date:  August 5, 2005                  By:        /S/TAKASHI MORIMURA
                                          --------------------------------------
                                                     Takashi Morimura
                                           PRESIDENT AND CHIEF EXECUTIVE OFFICER
                                              (Principal Executive Officer)


Date:  August 5, 2005                  By:         /S/DAVID I. MATSON
                                          --------------------------------------
                                                      David I. Matson
                                                     VICE CHAIRMAN AND
                                                 CHIEF FINANCIAL OFFICER
                                              (Principal Financial Officer)


Date:  August 5, 2005                  By:       /S/DAVID A. ANDERSON
                                          --------------------------------------
                                                    David A. Anderson
                                            SENIOR VICE PRESIDENT AND CONTROLLER
                                               (Chief Accounting Officer)


















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