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                                  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 September 30, 2003


                         Commission file number 1-15081


                             UNIONBANCAL CORPORATION


State of Incorporation: Delaware   I.R.S. Employer Identification No. 94-1234979


                              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  October 31,   2003:
145,417,533





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<TABLE>
<CAPTION>

                    UNIONBANCAL CORPORATION AND SUBSIDIARIES

                                TABLE OF CONTENTS
                                                                                PAGE
                                                                               NUMBER
                                                                               ------
PART I
<S>                                                                              <C>
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 Shareholders' 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............................................................. 20
       Summary.................................................................. 21
       Business Segments........................................................ 22
       Net Interest Income...................................................... 32
       Noninterest Income....................................................... 35
       Noninterest Expense...................................................... 37
       Income Tax Expense....................................................... 38
       Loans.................................................................... 38
       Cross-Border Outstandings................................................ 40
       Provision for Credit Losses.............................................. 41
       Allowance for Credit Losses.............................................. 41
       Nonperforming Assets..................................................... 45
       Loans 90 Days or More Past Due and Still Accruing........................ 46
       Quantitative and Qualitative Disclosure about Interest Rate Risk
         Management (Other Than Trading).....................................    46
       Liquidity Risk........................................................... 49
       Regulatory Capital....................................................... 50
       Certain Business Risk Factors............................................ 51
   Item 3. Quantitative and Qualitative Disclosure About Market Risk............ 55
   Item 4. Controls and Procedures.............................................. 55
PART II
OTHER INFORMATION
   Item 5. Other Information.................................................... 56
   Item 6. Exhibits and Reports on Form 8-K..................................... 56
Signatures...................................................................... 57

</TABLE>

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<TABLE>
<CAPTION>


                         PART I. FINANCIAL INFORMATION
                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
                        CONSOLIDATED FINANCIAL HIGHLIGHTS
                                   (Unaudited)

                                                                       AS OF AND FOR THE THREE MONTHS ENDED
                                                                   ------------------------------------------
                                                                   SEPTEMBER 30,     SEPTEMBER 30,    PERCENT
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)                           2002              2003         CHANGE
-----------------------------------------------------------------  -------------     -------------    -------
RESULTS OF OPERATIONS:
<S>                                                                <C>               <C>               <C>
   Net interest income(1)........................................  $     392,636     $     401,736      2.32%
   Provision for credit losses...................................         40,000            20,000    (50.00)
   Noninterest income............................................        169,116           201,470     19.13
   Noninterest expense...........................................        317,824           348,861      9.77
                                                                   -------------     -------------
   Income before income taxes(1).................................        203,928           234,345     14.92
   Taxable-equivalent adjustment.................................            534               647     21.16
   Income tax expense............................................         65,163            78,653     20.70
                                                                   -------------     -------------
Net income.......................................................  $     138,231     $     155,045     12.16%
                                                                   =============     =============
PER COMMON SHARE:
   Net income--basic.............................................  $        0.89     $        1.04     16.85%
   Net income--diluted...........................................           0.88              1.02     15.91
   Dividends(2)..................................................           0.28              0.31     10.71
   Book value (end of period)....................................          24.22             25.32      4.54
   Common shares outstanding (end of period).....................    150,220,119       145,105,566     (3.40)
   Weighted average common shares outstanding--basic.............    154,889,552       149,528,298     (3.46)
   Weighted average common shares outstanding--diluted...........    156,709,715       151,561,790     (3.29)
BALANCE SHEET (END OF PERIOD):
   Total assets..................................................  $  37,608,001     $  42,602,745     13.28%
   Total loans...................................................     25,962,159        26,047,376      0.33
   Nonaccrual loans..............................................        395,212           341,039    (13.71)
   Nonperforming assets..........................................        395,521           344,347    (12.94)
   Total deposits................................................     30,588,080        35,957,805     17.55
   Medium and long-term debt.....................................        418,369           417,369     (0.24)
   Trust preferred securities....................................        370,286           356,629     (3.69)
   Shareholders' equity..........................................      3,637,945         3,674,107      0.99
BALANCE SHEET (PERIOD AVERAGE):
   Total assets..................................................  $  35,803,475     $  41,913,515     17.07%
   Total loans...................................................     25,971,483        26,331,986      1.39
   Earning assets................................................     32,757,523        37,855,869     15.56
   Total deposits................................................     28,455,452        34,902,964     22.66
   Shareholders' equity..........................................      3,814,927         3,834,834      0.52
FINANCIAL RATIOS:
   Return on average assets(3)...................................           1.53%             1.47%
   Return on average shareholders' equity(3).....................          14.38             16.04
   Efficiency ratio(4)...........................................          56.57             57.85
   Net interest margin(1)........................................           4.77              4.22
   Dividend payout ratio.........................................          31.46             29.81
   Tangible equity ratio.........................................           9.38              8.05
   Tier 1 risk-based capital ratio...............................          11.14             10.96
   Total risk-based capital ratio................................          12.89             12.58
   Leverage ratio................................................          10.13              8.73
   Allowance for credit losses to total loans....................           2.40              2.11
   Allowance for credit losses to nonaccrual loans...............         157.66            161.43
   Net loans charged off to average total loans(3)...............           0.64              0.58
   Nonperforming assets to total loans and foreclosed assets.....           1.52              1.32
   Nonperforming assets to total assets..........................           1.05              0.81

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

(1)  Amounts are on a  taxable-equivalent  basis using the federal statutory tax
     rate of 35 percent.

(2)  Dividends per share reflect dividends declared on UnionBanCal Corporation's
     common stock outstanding as of the declaration date.

(3)  Annualized.

(4)  The efficiency  ratio is noninterest  expense,  excluding  foreclosed asset
     expense    (income),    as   a   percentage   of   net   interest    income
     (taxable-equivalent basis) and noninterest income.
</FN>
</TABLE>


                                       2
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<TABLE>
<CAPTION>

                         PART I. FINANCIAL INFORMATION
                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
                        CONSOLIDATED FINANCIAL HIGHLIGHTS
                                   (Unaudited)

                                                                       AS OF AND FOR THE NINE MONTHS ENDED
                                                                   ------------------------------------------
                                                                   SEPTEMBER 30,     SEPTEMBER 30,    PERCENT
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)                           2002              2003         CHANGE
-----------------------------------------------------------------  -------------     -------------    -------
RESULTS OF OPERATIONS:
<S>                                                                <C>               <C>               <C>
   Net interest income(1)........................................  $   1,159,907     $   1,179,562      1.69%
   Provision for credit losses...................................        145,000            75,000    (48.28)
   Noninterest income............................................        504,465           590,412     17.04
   Noninterest expense...........................................        946,102         1,042,465     10.19
                                                                   -------------     -------------
   Income before income taxes(1).................................        573,270           652,509     13.82
   Taxable-equivalent adjustment.................................          1,604             1,916     19.45
   Income tax expense............................................        188,716           215,273     14.07
                                                                   -------------     -------------
   Net income....................................................  $     382,950     $     435,320     13.68%
                                                                   =============     =============
PER COMMON SHARE:
   Net income--basic.............................................$          2.45     $        2.90     18.37%
   Net income--diluted...........................................           2.43              2.87     18.11
   Dividends(2)..................................................           0.81              0.90     11.11
   Book value (end of period)....................................          24.22             25.32      4.54
   Common shares outstanding (end of period).....................    150,220,119       145,105,566     (3.40)
   Weighted average common shares outstanding--basic.............    156,139,173       150,059,789     (3.89)
   Weighted average common shares outstanding--diluted...........    157,892,168       151,544,757     (4.02)
BALANCE SHEET (END OF PERIOD):
   Total assets..................................................$    37,608,001     $  42,602,745     13.28%
   Total loans...................................................     25,962,159        26,047,376      0.33
   Nonaccrual loans..............................................        395,212           341,039    (13.71)
   Nonperforming assets..........................................        395,521           344,347    (12.94)
   Total deposits................................................     30,588,080        35,957,805     17.55
   Medium and long-term debt.....................................        418,369           417,369     (0.24)
   Trust preferred securities....................................        370,286           356,629     (3.69)
   Shareholders' equity..........................................      3,637,945         3,674,107      0.99
BALANCE SHEET (PERIOD AVERAGE):
   Total assets..................................................$    35,541,802     $  40,025,749     12.62%
   Total loans...................................................     25,562,452        26,522,687      3.76
   Earning assets................................................     32,472,409        36,263,471     11.67
   Total deposits................................................     28,085,461        32,870,184     17.04
   Shareholders' equity..........................................      3,730,273         3,875,990      3.91
FINANCIAL RATIOS:
   Return on average assets(3)...................................           1.44%             1.45%
   Return on average shareholders' equity(3).....................          13.73             15.02
   Efficiency ratio(4)...........................................          56.84             58.90
   Net interest margin(1)........................................           4.77              4.35
   Dividend payout ratio.........................................          33.06             31.03
   Tangible equity ratio.........................................           9.38              8.05
   Tier 1 risk-based capital ratio...............................          11.14             10.96
   Total risk-based capital ratio................................          12.89             12.58
   Leverage ratio................................................          10.13              8.73
   Allowance for credit losses to total loans....................           2.40              2.11
   Allowance for credit losses to nonaccrual loans...............         157.66            161.43
   Net loans charged off to average total loans(3)...............           0.83              0.73
   Nonperforming assets to total loans and foreclosed assets.....           1.52              1.32
   Nonperforming assets to total assets..........................           1.05              0.81


------------------------------
<FN>
(1)  Amounts are on a  taxable-equivalent  basis using the federal statutory tax
     rate of 35 percent.

(2)  Dividends per share reflect dividends declared on UnionBanCal Corporation's
     common stock outstanding as of the declaration date.

(3)  Annualized.

(4)  The efficiency  ratio is noninterest  expense,  excluding  foreclosed asset
     expense    (income),    as   a   percentage   of   net   interest    income
     (taxable-equivalent basis) and noninterest income.
</FN>
</TABLE>

                                       3
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<TABLE>
<CAPTION>

ITEM 1. FINANCIAL STATEMENTS

                   UNIONBANCAL CORPORATION AND SUBSIDIARIES
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                   (Unaudited)

                                                                       FOR THE THREE MONTHS           FOR THE NINE MONTHS
                                                                        ENDED SEPTEMBER 30,           ENDED SEPTEMBER 30,
                                                                      -----------------------      -------------------------
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)                           2002           2003           2002           2003
----------------------------------------------------------------      --------       --------      ----------     ----------
<S>                                                                   <C>            <C>           <C>            <C>
INTEREST INCOME
   Loans........................................................      $381,989       $349,918      $1,136,359     $1,067,806
   Securities...................................................        77,518         93,252         237,098        251,151
   Interest bearing deposits in banks...........................           773            922           1,898          3,014
   Federal funds sold and securities purchased under resale
     agreements.................................................         1,467          2,532          10,354          8,210
   Trading account assets.......................................         1,366            870           2,987          2,740
                                                                      --------       --------      ----------     ----------
       Total interest income....................................       463,113        447,494       1,388,696      1,332,921
                                                                      --------       --------      ----------     ----------
INTEREST EXPENSE
   Domestic deposits............................................        52,049         34,984         167,395        116,772
   Foreign deposits.............................................         4,727          1,991          17,096          8,008
   Federal funds purchased and securities sold under
     repurchase agreements......................................         1,789            689           5,134          2,763
   Commercial paper.............................................         4,488          1,723          12,998          7,397
   Medium and long-term debt....................................         2,375          1,738           7,198          5,422
   UnionBanCal Corporation--obligated mandatorily redeemable
     preferred securities of subsidiary grantor trust...........         3,921          3,607          11,832         10,930
   Other borrowed funds.........................................         1,662          1,673           8,740          3,983
                                                                      --------       --------      ----------     ----------
       Total interest expense...................................        71,011         46,405         230,393        155,275
                                                                      --------       --------      ----------     ----------
NET INTEREST INCOME.............................................       392,102        401,089       1,158,303      1,177,646
   Provision for credit losses..................................        40,000         20,000         145,000         75,000
                                                                      --------       --------      ----------     ----------
       Net interest income after provision for credit losses....       352,102        381,089       1,013,303      1,102,646
                                                                      --------       --------      ----------     ----------
NONINTEREST INCOME
   Service charges on deposit accounts..........................        68,629         81,832         204,641        232,061
   Trust and investment management fees.........................        35,368         35,429         109,680        101,245
   International commissions and fees...........................        20,131         22,223          57,593         63,112
   Insurance commissions........................................         6,259         15,814          19,969         45,056
   Card processing fees, net....................................         9,068         10,335          26,343         29,357
   Brokerage commissions and fees...............................         9,034          7,549          27,614         24,614
   Merchant banking fees........................................         6,819          9,312          22,845         21,521
   Foreign exchange trading gains, net..........................         8,193          7,574          21,653         21,466
   Securities gains (losses), net...............................         1,017         (2,618)          2,986          7,042
   Other........................................................         4,598         14,020          11,141         44,938
                                                                      --------       --------      ----------     ----------
       Total noninterest income.................................       169,116        201,470         504,465        590,412
                                                                      --------       --------      ----------     ----------
NONINTEREST EXPENSE
   Salaries and employee benefits...............................       182,275        205,302         547,251        602,338
   Net occupancy................................................        27,340         31,342          75,750         91,844
   Equipment....................................................        16,343         15,680          48,650         48,705
   Communications...............................................        13,186         12,661          39,695         39,859
   Professional services........................................        10,350         12,676          30,789         38,256
   Data processing..............................................         7,944          7,659          24,475         23,887
   Foreclosed asset expense (income)............................            18            (79)            130            (28)
   Other........................................................        60,368         63,620         179,362        197,604
                                                                      --------       --------      ----------     ----------
       Total noninterest expense................................       317,824        348,861         946,102      1,042,465
                                                                      --------       --------      ----------     ----------
   Income before income taxes...................................       203,394        233,698         571,666        650,593
   Income tax expense...........................................        65,163         78,653         188,716        215,273
                                                                      --------       --------      ----------     ----------
NET INCOME......................................................      $138,231       $155,045      $  382,950     $  435,320
                                                                      ========       ========      ==========     ==========
NET INCOME PER COMMON SHARE--BASIC..............................      $   0.89       $   1.04      $     2.45     $     2.90
                                                                      ========       ========      ==========     ==========
NET INCOME PER COMMON SHARE--DILUTED............................      $   0.88       $   1.02      $     2.43     $     2.87
                                                                      ========       ========      ==========     ==========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING--BASIC...............       154,890        149,528         156,139        150,060
                                                                      ========       ========      ==========     ==========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING--DILUTED.............       156,710        151,562         157,892        151,545
                                                                      ========       ========      ==========     ==========
</TABLE>


     See accompanying notes to condensed consolidated financial statements.


                                       4
<PAGE>

<TABLE>
<CAPTION>


                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
                     CONDENSED CONSOLIDATED BALANCE SHEETS


                                                                         (UNAUDITED)                           (UNAUDITED)
                                                                        SEPTEMBER 30,       DECEMBER 31,      SEPTEMBER 30,
(DOLLARS IN THOUSANDS)                                                       2002               2002               2003
---------------------------------------------------------------------   -------------       ------------      -------------
<S>                                                                     <C>                 <C>               <C>
ASSETS
Cash and due from banks..............................................   $   2,184,714       $  2,823,573      $   2,619,580
Interest bearing deposits in banks...................................         139,323            278,849            341,230
Federal funds sold and securities purchased under resale
  agreements.........................................................       1,137,550          1,339,700          1,325,470
                                                                        -------------       ------------      -------------
   Total cash and cash equivalents...................................       3,461,587          4,442,122          4,286,280
Trading account assets...............................................         383,749            276,021            320,199
Securities available for sale:
   Securities pledged as collateral..................................         132,974            157,823             68,440
   Held in portfolio.................................................       6,061,875          7,109,498          9,930,281
Loans (net of allowance for credit losses: September 30, 2002,
   $623,078; December 31, 2002, $609,190; September 30, 2003,
   $550,550).........................................................      25,339,081         25,828,893         25,496,826
Due from customers on acceptances....................................          68,605             62,469             52,816
Premises and equipment, net..........................................         492,687            504,666            506,321
Intangible assets....................................................          23,119             38,518             49,288
Goodwill.............................................................          93,279            150,542            215,903
Other assets.........................................................       1,551,045          1,599,221          1,676,391
                                                                        -------------       ------------      -------------
   Total assets......................................................   $  37,608,001       $ 40,169,773      $  42,602,745
                                                                        =============       ============      =============
LIABILITIES
Domestic deposits:
   Noninterest bearing...............................................   $  14,125,497       $ 15,537,906      $  16,854,483
   Interest bearing..................................................      14,701,824         15,258,479         17,320,728
Foreign deposits:
   Noninterest bearing...............................................         401,202            583,836            556,687
   Interest bearing..................................................       1,359,557          1,460,594          1,225,907
                                                                        -------------       ------------      -------------
   Total deposits....................................................      30,588,080         32,840,815         35,957,805
Federal funds purchased and securities sold under repurchase
  agreements.........................................................         303,307            334,379            284,764
Commercial paper.....................................................         880,170          1,038,982            678,903
Other borrowed funds.................................................         218,282            267,047            240,803
Acceptances outstanding..............................................          68,605             62,469             52,816
Other liabilities....................................................       1,122,957          1,083,836            939,549
Medium and long-term debt............................................         418,369            418,360            417,369
UnionBanCal Corporation--obligated mandatorily redeemable
   preferred securities of subsidiary grantor trust..................         370,286            365,696            356,629
                                                                        -------------       ------------      -------------
   Total liabilities.................................................      33,970,056         36,411,584         38,928,638
                                                                        -------------       ------------      -------------
Commitments and contingencies

SHAREHOLDERS' EQUITY
Preferred stock:
   Authorized 5,000,000 shares, no shares issued or outstanding
   as of September 30, 2002, December 31, 2002, and
   September 30, 2003................................................              --                 --                 --
Common stock, par value $1 per share at September 30, 2003, and
   no stated value at September 30, 2002, and December 31, 2002(1):
   Authorized 300,000,000 shares, issued 150,220,119 shares as
   of September 30, 2002, 150,702,363 shares as of December 31,
   2002, and 145,105,566 shares as of September 30, 2003.............         907,088            926,460            145,106
Additional paid-in capital...........................................              --                 --            520,876
Retained earnings....................................................       2,488,873          2,591,635          2,893,240
Accumulated other comprehensive income...............................         241,984            240,094            114,885
                                                                        -------------       ------------      -------------
   Total shareholders' equity........................................       3,637,945          3,758,189          3,674,107
                                                                        -------------       ------------      -------------
   Total liabilities and shareholders' equity........................   $  37,608,001       $ 40,169,773      $  42,602,745
                                                                        =============       ============      =============

--------------------------------
<FN>
(1)  On  September  30,  2003,  UnionBanCal  Corporation  changed  its  state of
     incorporation  from California to Delaware,  establishing a par value of $1
     per share of common stock.
</FN>
</TABLE>

     See accompanying notes to condensed consolidated financial statements.



                                       5
<PAGE>

<TABLE>
<CAPTION>


                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
      CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                                   (Unaudited)

                                                                                    FOR THE NINE MONTHS ENDED SEPTEMBER 30,
                                                                           -------------------------------------------------------
(DOLLARS IN THOUSANDS)                                                               2002                            2003
-------------------------------------------------------------------------  ------------------------      -------------------------
<S>                                                                           <C>          <C>              <C>           <C>
COMMON STOCK
   Balance, beginning of period..........................................  $1,181,925                    $  926,460
   Reincorporation(1)....................................................          --                      (520,876)
   Dividend reinvestment plan............................................          85                            34
   Deferred compensation--restricted stock................................        255                           282
   Stock options exercised...............................................      72,953                        35,792
   Stock issued in bank acquisitions.....................................      23,852                        48,254
   Common stock repurchased(2)...........................................    (371,982)                     (344,840)
                                                                           ----------                    ----------
      Balance, end of period.............................................  $  907,088                    $  145,106
                                                                           ----------                    ----------
ADDITIONAL PAID-IN CAPITAL
   Balance, beginning of period..........................................  $       --                    $       --
   Reincorporation(1)....................................................          --                       520,876
                                                                           ----------                    ----------
      Balance, end of period.............................................  $       --                    $  520,876
                                                                           ----------                    ----------
RETAINED EARNINGS
   Balance, beginning of period..........................................  $2,231,384                    $2,591,635
   Net income............................................................     382,950      $382,950         435,320       $435,320
   Dividends on common stock(3)..........................................    (125,345)                     (133,603)
Deferred compensation--restricted stock...................................       (116)                         (112)
                                                                           ----------                    ----------
      Balance, end of period.............................................  $2,488,873                    $2,893,240
                                                                           ----------                    ----------
ACCUMULATED OTHER COMPREHENSIVE INCOME
   Balance, beginning of period..........................................  $  132,933                    $  240,094
   Unrealized net gains on cash flow hedges, net of tax expense of $61,525
   and $18,408 in the first nine months of 2002 and 2003, respectively...                    99,325                         29,718
   Less: reclassification adjustment for net gains on cash flow hedges
   included in net income, net of tax expense of $31,920 and $41,878 in
   the first nine months of 2002 and 2003, respectively..................                   (51,532)                       (67,607)
                                                                                           --------                       --------
   Net increase (reduction) in unrealized gains on cash flow hedges......                    47,793                        (37,889)
   Unrealized holding gains (losses) arising during the period on
   securities available for sale, net of tax expense (benefit) of $38,360
   and $(51,920) in the first nine months of 2002 and 2003, respectively.                    61,927                        (83,819)
   Less: reclassification adjustment for gains on securities available for
   sale included in net income, net of tax expense of $1,142 and $2,694 in
   the first nine months of 2002 and 2003, respectively..................                    (1,844)                        (4,348)
                                                                                           --------                       --------
   Net unrealized gains (losses) on securities available for sale........                    60,083                        (88,167)
   Foreign currency translation adjustment, net of tax expense of $728 and
   $525 in the first nine months of 2002 and 2003, respectively..........                     1,175                            847

   Other comprehensive income............................................     109,051       109,051        (125,209)      (125,209)
                                                                           ----------      --------      ----------       --------
   Total comprehensive income............................................                  $492,001                       $310,111
                                                                                           ========                       ========
      Balance, end of period.............................................  $  241,984                    $  114,885
                                                                           ----------                    ----------
        TOTAL SHAREHOLDERS' EQUITY.......................................  $3,637,945                    $3,674,107
                                                                           ==========                    ==========

----------------------------------
<FN>
(1)  On  September  30,  2003,  UnionBanCal  Corporation  changed  its  state of
     incorporation  from California to Delaware,  establishing a par value of $1
     per share of common stock.

(2)  Common stock repurchased includes commission costs.

(3)  Dividends  per share were $0.81 and $0.90 for the first nine months of 2002
     and 2003,  respectively.  Dividends  per  share  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>


<TABLE>
<CAPTION>


                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

                                                                                       FOR THE NINE MONTHS
                                                                                       ENDED SEPTEMBER 30,
                                                                                 ------------------------------
(DOLLARS IN THOUSANDS)                                                               2002               2003
---------------------------------------------------------------------------      -----------        -----------
<S>                                                                              <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income..............................................................      $   382,950        $   435,320
    Adjustments to reconcile net income to net cash provided by
    operating activities:
          Provision for credit losses......................................          145,000             75,000
          Depreciation, amortization and accretion.........................           62,563             87,332
          Provision for deferred income taxes..............................           42,941             60,425
          Gain on securities available for sale............................           (2,986)            (7,042)
          Net increase in prepaid expenses.................................          (90,962)           (89,272)
          Net increase (decrease) in accrued expenses......................          111,449           (103,652)
          Net increase in trading account assets...........................         (154,052)           (44,178)
          Loans originated for resale......................................         (502,542)          (269,186)
          Net proceeds from sale of loans originated for resale............          499,871            291,198
          Other, net.......................................................         (192,675)          (159,887)
                                                                                 -----------        -----------
          Total adjustments................................................          (81,393)          (159,262)
                                                                                 -----------        -----------
   Net cash provided by operating activities...............................          301,557            276,058
                                                                                 ===========        ===========
CASH FLOWS FROM INVESTING ACTIVITIES:
   Proceeds from sales of securities available for sale....................          175,552            308,051
   Proceeds from matured and called securities available for sale..........          856,160          2,689,120
   Purchases of securities available for sale..............................       (1,425,404)        (5,849,353)
   Net (increase) decrease in loans........................................       (1,008,214)           758,743
   Net cash received (paid) in acquisitions................................           64,689            (60,920)
   Purchases of premises and equipment.....................................          (55,256)           (70,192)
   Other, net..............................................................           20,963                823
                                                                                 -----------        -----------
          Net cash used in investing activities............................       (1,371,510)        (2,223,728)
                                                                                 -----------        -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Net increase in deposits................................................        1,827,256          2,650,264
   Net decrease in federal funds purchased and securities sold
     under repurchase agreements...........................................         (115,507)           (49,615)
   Net decrease in commercial paper and other borrowed funds...............         (432,608)          (386,323)
   Common stock repurchased................................................         (371,982)          (344,840)
   Payments of cash dividends..............................................         (122,228)          (130,896)
   Stock options exercised.................................................           72,953             35,792
   Other, net..............................................................            1,260                881
                                                                                 -----------        -----------
          Net cash provided by financing activities........................          859,144          1,775,263
                                                                                 -----------        -----------
Net decrease in cash and cash equivalents..................................         (210,809)          (172,407)
Cash and cash equivalents at beginning of period...........................        3,664,954          4,442,122
Effect of exchange rate changes on cash and cash equivalents...............            7,442             16,565
                                                                                 -----------        -----------
Cash and cash equivalents at end of period.................................      $ 3,461,587        $ 4,286,280
                                                                                 ===========        ===========
CASH PAID DURING THE PERIOD FOR:
   Interest                                                                      $   237,723        $   155,469
   Income taxes............................................................          110,253            187,723

SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
    Acquisitions:
          Fair value of assets acquired....................................      $   256,276        $   721,749
       Purchase price:
            Cash...........................................................          (20,940)           (83,597)
            Stock issued...................................................          (23,852)           (48,254)
                                                                                 -----------        -----------
          Liabilities assumed..............................................      $   211,484        $   589,898
                                                                                 ===========        ===========
</TABLE>


     See accompanying notes to condensed consolidated financial statements.


                                       7
<PAGE>


                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2003
                                   (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.  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  September  30,  2003  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  Form 10-K/A for the year ended December 31, 2002. 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,  the Company has announced  stock  repurchase  plans
totaling  $500 million and as of September  30, 2003 has expended  $385 million.
The Company  repurchased $86 million and $45 million of common stock in 2002 and
the first nine months of 2003, respectively,  as part of these repurchase plans.
As of  September  30,  2003,  $115  million  of the  Company's  common  stock is
authorized for repurchase.  In addition,  the Company  purchased $600 million of
its common  stock,  $300  million in August 2002 and $300  million in  September
2003, from its majority owner, The Bank of  Tokyo-Mitsubishi,  Ltd. (BTM), which
is a  wholly-owned  subsidiary  of Mitsubishi  Tokyo  Financial  Group,  Inc. At
September  30,  2003,  BTM  owned  approximately  63  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-TRANSITION AND DISCLOSURE

     In December 2002, the Financial  Accounting  Standards  Board (FASB) issued
Statement of Financial  Accounting  Standards  (SFAS) No. 148,  "Accounting  for
Stock-Based Compensation--Transition and Disclosure," which amends SFAS No. 123,
"Accounting for Stock-Based  Compensation." This Statement provides  alternative
methods of transition  for a voluntary  change to the fair value based method of
accounting for stock-based employee compensation.  It also amends the disclosure
requirements  to  require  prominent  disclosure  in  both  annual  and  interim
financial  statements  about the method of accounting for  stock-based  employee
compensation  and the  effect  of the  method  used  on  reported  results.  The
disclosure  requirements  under  this  Statement  are  effective  for  financial
statements issued after December 15, 2002.

     As allowed under the  provisions  of SFAS No. 123, as amended,  the Company
has chosen to continue to recognize  compensation  expense  using the  intrinsic
value-based method of valuing stock options


                                       8
<PAGE>

                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                               SEPTEMBER 30, 2003
                                   (Unaudited)

NOTE 1--BASIS OF PRESENTATION AND NATURE OF OPERATIONS (Continued)

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  September  30,  2003,   the  Company  has  two   stock-based   employee
compensation plans. For further discussion  concerning our stock-based  employee
compensation  plans  see  Note  14--"Management  Stock  Plan"  of the  Notes  to
Consolidated Financial Statements included in the Form 10-K/A for the year ended
December  31,  2002.  Only  restricted  stock  awards  have  been  reflected  in
compensation  expense,  while  all  options  granted  under  those  plans had an
exercise price equal to the market value of the  underlying  common stock on the
date of grant.

     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.

<TABLE>
<CAPTION>


                                                             THREE MONTHS ENDED            NINE MONTHS ENDED
                                                               SEPTEMBER 30,                  SEPTEMBER 30,
                                                            ---------------------        ---------------------
(DOLLARS IN THOUSANDS)                                        2002         2003            2002         2003
---------------------------------------------------------   --------     --------        --------     --------
<S>                                                         <C>          <C>             <C>          <C>
AS REPORTED NET INCOME...................................   $138,231     $155,045        $382,950     $435,320
Stock option-based employee compensation expense
 (determined under fair value based method
  for all awards, net of taxes)..........................     (5,778)      (6,479)        (15,696)     (18,962)
                                                            --------     --------        --------     --------
Pro forma net income, after stock option-based
 employee compensation expense...........................   $132,453     $148,566        $367,254     $416,358
                                                            ========     ========        ========     ========
EARNINGS PER SHARE--BASIC
As reported..............................................   $   0.89     $   1.04        $   2.45     $   2.90
Pro forma................................................   $   0.86     $   0.99        $   2.35     $   2.77
EARNINGS PER SHARE--DILUTED
As reported..............................................   $   0.88     $   1.02        $   2.43     $   2.87
Pro forma................................................   $   0.85     $   0.98        $   2.33     $   2.75

</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 third quarters
and the first nine months of 2002 and 2003 was not significant.

NOTE 2--RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

     ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

     In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on
Derivative  Instruments  and  Hedging  Activities."  This  Statement  amends and
clarifies  financial  accounting  and  reporting  for  derivative   instruments,
including  certain  derivative  instruments  embedded in other contracts and for
hedging  activities under SFAS No. 133,  "Accounting for Derivative  Instruments
and  Hedging


                                       9
<PAGE>

                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                               SEPTEMBER 30, 2003
                                  (Unaudited)

NOTE 2--RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (Continued)

Activities."  The  changes in this  Statement  improve  financial  reporting  by
requiring  that  contracts  with  comparable  characteristics  be accounted  for
similarly.  SFAS No. 149 is  effective  for  contracts  entered into or modified
after September 30, 2003, except as stated below, and for hedging  relationships
designated  after  September 30, 2003.  All provisions of SFAS No. 149 should be
applied prospectively.

     The  provisions of SFAS No. 149 that relate to SFAS No. 133  implementation
issues that have been effective for fiscal quarters that began prior to June 15,
2003, will be applied in accordance with their  respective  effective  dates. In
addition,  the provisions of SFAS No. 149, which relate to forward  purchases or
sales of when-issued  securities or other securities that do not exist,  will be
applied  to  both  existing  contracts  and new  contracts  entered  into  after
September 30, 2003.  Management believes that adoption of the provisions of this
Statement will not have a material impact on the Company's financial position or
results of operations.

     ACCOUNTING FOR CERTAIN FINANCIAL  INSTRUMENTS WITH  CHARACTERISTICS OF BOTH
     LIABILITIES AND EQUITY

     In May  2003,  the  FASB  issued  SFAS No.  150,  "Accounting  for  Certain
Financial  Instruments with Characteristics of both Liabilities and Equity." The
Statement  establishes standards for how the Company should classify and measure
certain  financial  instruments  with  characteristics  of both  liabilities and
equity.  SFAS No. 150 is effective  for  financial  instruments  entered into or
modified after May 31, 2003, and is otherwise  effective at the beginning of the
first interim  period  beginning  after June 15, 2003. The new standards for the
classification  and  measurement  of  financial  instruments  should be  applied
retroactively.  Any gain or loss resulting from the  implementation  of SFAS No.
150 will be reported as a cumulative effect of a change in accounting principle.
Adoption  of this  Statement  did not have a  material  impact on the  Company's
financial position or results of operations.

     ACCOUNTING  FOR  GUARANTORS AND  DISCLOSURE  REQUIREMENTS  FOR  GUARANTEES,
     INCLUDING INDIRECT GUARANTEES OF INDEBTEDNESS OF OTHERS

     In  November  2002,  the FASB  issued  FASB  Interpretation  No.  (FIN) 45,
"Guarantor's  Accounting and Disclosure  Requirements for Guarantees,  Including
Indirect Guarantees of Indebtedness of Others." FIN 45 expands on the accounting
guidance of Statements  No. 5, 57, and 107 and  incorporates  without change the
provisions  of FIN 34, which is  superseded.  FIN 45  elaborates on the existing
disclosure  requirements  for  most  guarantees  and  requires  that  guarantors
recognize  a  liability  for the fair  value of  guarantees  at  inception.  The
disclosure  requirements of FIN 45 are effective for financial statement periods
ending  after  December  15,  2002.  The  initial  recognition  and  measurement
provisions of FIN 45 are applied on a prospective  basis to guarantees issued or
modified  after  December  31,  2002.  A  complete  description  of  significant
guarantees  that have been entered into by the Company may be found in "Note 7--
Guarantees."  Adopting  the  measurement  provisions  of FIN 45 did  not  have a
material  impact at the adoption date and  management  believes that it will not
have a material impact on the Company's future financial  position or results of
operations.





                                       10
<PAGE>

                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                               SEPTEMBER 30, 2003
                                   (Unaudited)


NOTE 2--RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (Continued)

     CONSOLIDATION OF VARIABLE INTEREST ENTITIES

     In  January  2003,  the FASB  issued  FIN 46,  "Consolidation  of  Variable
Interest Entities." The purpose of this interpretation is to provide guidance on
how to identify a variable  interest entity (VIE) and determine 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 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. New disclosure  requirements are also
prescribed  by FIN 46. On October 9, 2003,  the FASB issued FASB Staff  Position
(FSP) No. FIN 46-6  deferring the effective  date for applying the provisions of
FIN 46. The Company need not apply the  provisions of FIN 46 to an interest held
in a VIE  created  before  February  1, 2003  until  December  31,  2003.  As of
September 30, 2003,  management believes the Company does not have any VIE's for
which this interpretation would require  consolidation.  However,  under FIN 46,
the  Company's  subsidiary,  which issued trust  preferred  securities,  will be
deconsolidated.  Deconsolidation  of this  entity in the fourth  quarter of 2003
will cause total assets and total liabilities to increase by approximately $10.8
million with no change to the Company's results of operations.

     For additional information on recently issued accounting pronouncements and
other  significant  accounting  principles,  see Note 1--"Summary of Significant
Accounting  Policies  and  Nature of  Operations"  of the Notes to  Consolidated
Financial Statements included in the Form 10-K/A for the year ended December 31,
2002.

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 nine months ended September 30, 2002 and 2003.

<TABLE>
<CAPTION>


                                     THREE MONTHS ENDED SEPTEMBER 30,                   NINE MONTHS ENDED SEPTEMBER 30,
                            ------------------------------------------------   --------------------------------------------------
                                     2002                      2003                    2002                         2003
                            ---------------------     ----------------------   ---------------------        ---------------------
(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...............   $138,231     $138,231     $155,045      $155,045   $382,950     $382,950        $435,320     $435,320
                            ========     ========     ========      ========   ========     ========        ========     ========
Weighted average common
  shares outstanding.....    154,890      154,890      149,528       149,528    156,139      156,139         150,060      150,060
Additional shares due to:
Assumed conversion of
  dilutive stock options          --        1,820           --         2,034         --        1,753              --        1,485
                            --------     --------     --------      --------   --------     --------        --------     --------
Adjusted weighted average
  common shares
  outstanding............    154,890      156,710      149,528       151,562    156,139      157,892         150,060      151,545
                            ========     ========     ========      ========   ========     ========        ========     ========
Net income per share.....   $   0.89     $   0.88     $   1.04      $   1.02   $   2.45     $   2.43        $   2.90     $   2.87
                            ========     ========     ========      ========   ========     ========        ========     ========

</TABLE>





                                       11
<PAGE>


                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                               SEPTEMBER 30, 2003
                                   (Unaudited)


NOTE 4--ACCUMULATED OTHER COMPREHENSIVE INCOME

     The following  table  presents a summary of the  components of  accumulated
other comprehensive income.

<TABLE>
<CAPTION>

                                                              NET UNREALIZED GAINS
                                NET UNREALIZED GAINS             ON SECURITIES                  FOREIGN CURRENCY
                                 ON CASH FLOW HEDGES          AVAILABLE FOR SALE             TRANSLATION ADJUSTMENT
                                ---------------------        ---------------------         --------------------------
                                                    FOR THE NINE MONTHS ENDED SEPTEMBER 30,
                                -------------------------------------------------------------------------------------
(DOLLARS IN THOUSANDS)            2002         2003            2002         2003             2002             2003
-----------------------------   --------     --------        --------     --------         --------         ---------
<S>                              <C>         <C>             <C>          <C>              <C>              <C>
Beginning balance............    $62,840     $104,368        $ 83,271     $147,450         $(12,205)        $ (10,649)
Change during the period.....     47,793      (37,889)         60,083      (88,167)           1,175               847
                                --------     --------        --------     --------         --------         ---------
Ending balance...............   $110,633     $ 66,479        $143,354     $ 59,283         $(11,030)        $  (9,802)
                                ========     ========        ========     ========         ========         =========
</TABLE>

<TABLE>
<CAPTION>

                                                                MINIMUM PENSION                 ACCUMULATED OTHER
                                                             LIABILITY ADJUSTMENT             COMPREHENSIVE INCOME
                                                             ---------------------         --------------------------
                                                                     FOR THE NINE MONTHS ENDED SEPTEMBER 30,
                                                             --------------------------------------------------------
(DOLLARS IN THOUSANDS)                                         2002         2003             2002             2003
------------------------------------------------------       --------     --------         --------         ---------
<S>                                                          <C>          <C>              <C>              <C>
Beginning balance.....................................       $   (973)    $ (1,075)        $132,933         $ 240,094
Change during the period..............................             --           --          109,051          (125,209)
                                                             --------     --------         --------         ---------
Ending balance........................................       $   (973)    $ (1,075)        $241,984         $ 114,885
                                                             ========     ========         ========         =========

</TABLE>


NOTE 5--BUSINESS SEGMENTS

     The Company is organized  based on the products and services that it offers
and operates in four 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 network of branches and ATM's.
          These services include commercial loans, mortgages,  home equity lines
          of credit,  consumer loans, cash management and deposit  services,  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.

     o    The  Commercial  Financial  Services  Group  provides  credit and cash
          management and deposit  services to large  corporate and middle market
          companies.  Services include commercial and project loans, real estate
          financing, asset-based financing, trade finance and letters of credit,
          lease financing, cash management services and selected capital markets
          products.

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

     o    The Global  Markets  Group  manages the  Company's  wholesale  funding
          needs,  securities  portfolio,  and interest rate and liquidity risks.
          The group also  offers a broad  range of risk  management  and


                                       12
<PAGE>


                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                               SEPTEMBER 30, 2003
                                   (Unaudited)

NOTE 5--BUSINESS SEGMENTS (Continued)

          trading products to institutional  and business clients of the Company
          through the businesses described above.

     The information,  set forth in the tables on the following pages,  reflects
selected  income  statement  and  balance  sheet  items by  business  unit.  The
information  presented  does  not  necessarily  represent  the  business  units'
financial  condition and results of operations were they  independent  entities.
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  information  in these tables is 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" includes the following items:

     o    corporate activities that are not directly  attributable to one of the
          four major business units. Included in this category are certain other
          nonrecurring  items such as merger and  integration  expense,  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;

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

     o    the Pacific Rim Corporate Group,  with assets at September 30, 2003 of
          $295 million, which offers a range of credit,  deposit, and investment
          management  products  and  services to  companies in the US, which are
          affiliated with companies headquartered in Japan; and

     o    the residual costs of support groups.





                                       13
<PAGE>


                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                               SEPTEMBER 30, 2003
                                   (Unaudited)

NOTE 5--BUSINESS SEGMENTS (Continued)

     The business  units'  results for the prior  periods have been  restated to
reflect certain transfer pricing changes and any reorganization changes that may
have occurred.

<TABLE>
<CAPTION>

                                                    COMMUNITY BANKING            COMMERCIAL FINANCIAL           INTERNATIONAL
                                                 AND INVESTMENT SERVICES            SERVICES GROUP              BANKING GROUP
                                                 -----------------------        ---------------------       --------------------
                                                                AS OF AND FOR THE THREE MONTHS ENDED SEPTEMBER 30,
                                                 -------------------------------------------------------------------------------
                                                    2002          2003            2002         2003           2002        2003
---------------------------------------------    ---------      --------        --------     --------       --------     -------
<S>                                              <C>            <C>             <C>          <C>            <C>          <C>
RESULTS OF OPERATIONS (DOLLARS IN THOUSANDS):
Net interest income..........................    $ 197,080      $231,992        $173,635     $219,812       $  9,153     $10,545
Noninterest income...........................       96,823       110,908          47,290       67,591         17,268      18,117
                                                 ---------      --------        --------     --------       --------     -------
Total revenue................................      293,903       342,900         220,925      287,403         26,421      28,662
Noninterest expense..........................      175,543       202,269          99,091      103,182         15,746      15,418
Credit expense (income)......................        7,528         7,996          47,215       39,397            474         511
                                                 ---------      --------        --------     --------       --------     -------
Income before income tax expense (benefit)...      110,832       132,635          74,619      144,824         10,201      12,733
Income tax expense (benefit).................       42,393        50,733          23,485       49,002          3,902       4,870
                                                 ---------      --------        --------     --------       --------     -------
Net income (loss)............................    $  68,439      $ 81,902        $ 51,134     $ 95,822       $  6,299     $ 7,863
                                                 =========      ========        ========     ========       ========     =======
TOTAL ASSETS, END OF PERIOD (dollars in
  millions):                                     $  11,026      $ 12,958        $ 16,103     $ 14,255       $  1,680     $ 2,012
                                                 =========      ========        ========     ========       ========     =======

</TABLE>

<TABLE>
<CAPTION>


                                                          GLOBAL                                                 UNIONBANCAL
                                                       MARKETS GROUP                    OTHER                    CORPORATION
                                                  ----------------------        ---------------------       ---------------------
                                                                   AS OF AND FOR THE THREE MONTHS ENDED SEPTEMBER 30,
                                                  -------------------------------------------------------------------------------
                                                    2002          2003            2002         2003           2002         2003
------------------------------------------------- --------      --------        --------     --------       --------     --------
<S>                                               <C>           <C>             <C>          <C>            <C>          <C>
RESULTS OF OPERATIONS (DOLLARS IN THOUSANDS):
Net interest income.............................. $ (6,763)     $(78,254)       $ 18,997     $ 16,994       $392,102     $401,089
Noninterest income...............................    2,561        (1,097)          5,174        5,951        169,116      201,470
                                                  --------      --------        --------     --------       --------     --------
Total revenue....................................   (4,202)      (79,351)         24,171       22,945        561,218      602,559
Noninterest expense..............................    3,756         3,926          23,688       24,066        317,824      348,861
Credit expense (income)..........................       50            50         (15,267)     (27,954)        40,000       20,000
                                                  --------      --------        --------     --------       --------     --------
Income (loss) before income tax expense (benefit)   (8,008)      (83,327)         15,750       26,833        203,394      233,698
Income tax expense (benefit).....................   (3,063)      (31,872)         (1,554)       5,920         65,163       78,653
                                                  --------      --------        --------     --------       --------     --------
Net income (loss)................................ $ (4,945)     $(51,455)       $ 17,304     $ 20,913       $138,231     $155,045
                                                  ========      ========        ========     ========       ========     ========
TOTAL ASSETS, END OF PERIOD (dollars in
  millions):..................................... $  7,863      $ 12,046        $    936     $  1,332       $ 37,608     $ 42,603
                                                  ========      ========        ========     ========       ========     ========
</TABLE>






                                       14
<PAGE>

                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                               SEPTEMBER 30, 2003
                                   (Unaudited)

NOTE 5--BUSINESS SEGMENTS (Continued)

<TABLE>
<CAPTION>

                                                     COMMUNITY BANKING           COMMERCIAL FINANCIAL          INTERNATIONAL
                                                  AND INVESTMENT SERVICES           SERVICES GROUP             BANKING GROUP
                                                  ----------------------        ---------------------       --------------------
                                                                  AS OF AND FOR THE NINE MONTHS ENDED SEPTEMBER 30,
                                                  ------------------------------------------------------------------------------
                                                    2002          2003            2002         2003           2002        2003
------------------------------------------------- --------      --------        --------     --------       --------     -------
<S>                                               <C>           <C>             <C>          <C>            <C>          <C>
RESULTS OF OPERATIONS (DOLLARS IN THOUSANDS):
Net interest income.............................. $567,837      $650,542        $499,248     $616,175       $ 28,024     $30,593
Noninterest income...............................  280,221       324,367         150,268      187,055         49,988      59,690
                                                  --------      --------        --------     --------       --------     -------
Total revenue....................................  848,058       974,909         649,516      803,230         78,012      90,283
Noninterest expense..............................  524,327       599,386         285,795      307,622         46,155      45,600
Credit expense (income)..........................   25,419        23,778         141,735      124,004          1,428       1,563
                                                  --------      --------        --------     --------       --------     -------
Income before income tax expense (benefit).......  298,312       351,745         221,986      371,604         30,429      43,120
Income tax expense (benefit).....................  114,104       134,543          70,463      122,843         11,639      16,493
                                                  --------      --------        --------     --------       --------     -------
Net income (loss)................................ $184,208      $217,202        $151,523     $248,761       $ 18,790     $26,627
                                                  ========      ========        ========     ========       ========     =======
TOTAL ASSETS, END OF PERIOD (dollars
  in millions):.................................. $ 11,026      $ 12,958        $ 16,103     $ 14,255       $  1,680     $ 2,012
                                                  ========      ========        ========     ========       ========     =======

</TABLE>


<TABLE>
<CAPTION>



                                                          GLOBAL                                                UNIONBANCAL
                                                      MARKETS GROUP                     OTHER                   CORPORATION
                                                  -----------------------       ---------------------     ------------------------
                                                                 AS OF AND FOR THE NINE MONTHS ENDED SEPTEMBER 30,
                                                  --------------------------------------------------------------------------------
                                                    2002          2003            2002         2003           2002         2003
-----------------------------------------         --------      ---------       --------     --------     ----------    ----------
<S>                                               <C>           <C>             <C>          <C>          <C>           <C>
RESULTS OF OPERATIONS (DOLLARS IN
   THOUSANDS):
Net interest income......................         $  5,955      $(172,029)      $ 57,239     $ 52,365     $1,158,303    $1,177,646
Noninterest income.......................            8,788          2,311         15,200       16,989        504,465       590,412
                                                  --------      ---------       --------     --------     ----------    ----------
Total revenue............................           14,743       (169,718)        72,439       69,354      1,662,768     1,768,058
Noninterest expense......................           11,677         11,726         78,148       78,131        946,102     1,042,465
Credit expense (income)..................              150            150        (23,732)     (74,495)       145,000        75,000
                                                  --------      ---------       --------     --------     ----------    ----------
Income (loss) before income tax expense
   (benefit).............................            2,916       (181,594)        18,023       65,718        571,666       650,593
Income tax expense (benefit).............            1,115        (69,459)        (8,605)      10,853        188,716       215,273
                                                  --------      ---------       --------     --------     ----------    ----------
Net income (loss)........................         $  1,801      $(112,135)      $ 26,628     $ 54,865     $  382,950    $  435,320
                                                  ========      =========       ========     ========     ==========    ==========
TOTAL ASSETS, END OF PERIOD (dollars in
   millions):............................         $  7,863      $  12,046       $    936     $  1,332     $   37,608    $   42,603
                                                  ========      =========       ========     ========     ==========    ==========

</TABLE>


NOTE 6--DERIVATIVE INSTRUMENTS AND OTHER FINANCIAL INSTRUMENTS USED FOR HEDGING

     Derivative  positions are integral  components of the Company's  designated
asset and  liability  management  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,   trust  preferred
securities and medium-term notes.


                                       15
<PAGE>

                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                               SEPTEMBER 30, 2003
                                   (Unaudited)

NOTE 6--DERIVATIVE INSTRUMENTS AND OTHER FINANCIAL INSTRUMENTS USED FOR HEDGING
        (Continued)

     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 interest payments,  and
the  hedged  risk is the  variability  in those  payments  due to changes in the
designated  benchmark  rate,  e.g., US dollar LIBOR.  In these  strategies,  the
hedging instruments are matched with groups of variable rate loans such that the
tenor  of the  variable  rate  loans  and  that  of the  hedging  instrument  is
identical.  Cash flow hedging  strategies  include the  utilization of purchased
floor, cap, corridor options and interest rate swaps. At September 30, 2003, the
weighted average life of these cash flow hedges is approximately 1.6 years.

     The Company uses purchased  interest rate floors to hedge the variable cash
flows  associated  with 1-month LIBOR or 3-month LIBOR indexed  loans.  Payments
received  under the floor  contract  offset the decline in loan interest  income
caused by the relevant LIBOR index falling below the floor's strike rate.

     The Company uses interest  rate floor  corridors to hedge the variable cash
flows associated with 1-month LIBOR or 3-month LIBOR indexed loans. Net payments
to be received  under the floor  corridor  contracts  offset the decline in loan
interest  income caused by the relevant LIBOR index falling below the corridor's
upper  strike  rate,  but only to the extent the index falls to the lower strike
rate.  The corridor  will not provide  protection  from declines in the relevant
LIBOR index to the extent it falls below the corridor's lower strike rate.

     The Company uses  interest  rate  collars to hedge the variable  cash flows
associated with 1-month LIBOR or 3-month LIBOR indexed loans. Net payments to be
received under the collar  contracts  offset the decline in loan interest income
caused by the relevant LIBOR index falling below the collar's  strike rate while
net payments to be paid will reduce the increase in loan interest  income caused
by the LIBOR index rising above the collar's cap strike rate.

     The  Company  uses  interest  rate swaps to hedge the  variable  cash flows
associated  with 1-month LIBOR or 3-month LIBOR  indexed  loans.  Payments to be
received (or paid) under the swap contracts will offset the fluctuations in loan
interest  income caused by changes in the relevant LIBOR index.  As such,  these
instruments  hedge all  fluctuations  in the loans'  interest  income  caused by
changes in the relevant LIBOR index.

     The Company uses  purchased  interest  rate caps and cap corridors to hedge
the variable  interest cash flows  associated  with the forecasted  issuance and
rollover of short-term,  fixed rate negotiable certificates of deposit (CDs). In
these hedging  relationships,  the Company hedges the LIBOR  component of the CD
rates,  which is  either  3-month  LIBOR  or  6-month  LIBOR,  based on the CD's
original  term to  maturity,  which  reflects  their  repricing  frequency.  Net
payments  to be  received  under  these cap  contracts  offset the  increase  in
interest  expense  caused by the  relevant  LIBOR index  rising  above the caps'
strike rates.  Cap corridors will not provide  protection  from increases in the
relevant  LIBOR  index to the  extent it rises  above the cap  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


                                       16
<PAGE>


                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                               SEPTEMBER 30, 2003
                                   (Unaudited)

NOTE 6--DERIVATIVE INSTRUMENTS AND OTHER FINANCIAL INSTRUMENTS USED FOR HEDGING
        (Continued)

matches those of the loans or CDs, and the period in which the designated hedged
cash  flows  occurs  is  equal to the term of the  hedge.  As such,  most of the
ineffectiveness  in the hedging  relationship  results from the mismatch between
the timing of reset dates on the hedge  versus those of the loans or CDs. In the
third  quarter  of 2003,  the  Company  recognized  a net gain of less than $0.1
million due to  ineffectiveness,  which is  recognized in  noninterest  expense,
compared to a net gain of $0.2 million in the third quarter of 2002.

     FAIR VALUE HEDGES

     HEDGING   STRATEGY  FOR  UNIONBANCAL   CORPORATION--OBLIGATED   MANDATORILY
     REDEEMABLE   PREFERRED   SECURITIES  OF  SUBSIDIARY  GRANTOR  TRUST  (TRUST
     PREFERRED SECURITIES)

     The  Company  engages in an  interest  rate  hedging  strategy  in which an
interest rate swap is associated  with a specific  interest  bearing  liability,
UnionBanCal  Corporation's Trust Preferred  Securities,  in order to convert the
liability  from a fixed  rate  to a  floating  rate  instrument.  This  strategy
mitigates the changes in fair value of the hedged liability caused by changes in
the designated benchmark interest rate, US dollar LIBOR.

     Fair value  hedging  transactions  are  structured at inception so that the
notional  amounts of the swap match an associated  principal amount of the Trust
Preferred  Securities.  The interest payment dates, the expiration date, and the
embedded call option of the swap match those of the Trust Preferred  Securities.
The  ineffectiveness  on the fair  value  hedges  in the third  quarter  of 2003
resulted in a net gain of less than $0.1 million, compared to a net loss of less
than $0.1 million in the third quarter of 2002.

     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, in order to convert the
liability  from a fixed  rate  to a  floating  rate  instrument.  This  strategy
mitigates the changes in fair value of the hedged liability caused by changes in
the designated benchmark interest rate, US dollar LIBOR.

     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.

     OTHER

     The Company uses foreign currency forward  contracts as a means of managing
foreign exchange rate risk associated with assets and/or liabilities denominated
in foreign  currencies.  The Company  values the forward  contracts,  the assets
and/or the liabilities at fair value, with the resultant gain or loss recognized
in noninterest income.

     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.


                                       17
<PAGE>


                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                               SEPTEMBER 30, 2003
                                   (Unaudited)


NOTE 7--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 September  30, 2003,  the Company's
maximum  exposure to loss for standby and  commercial  letters of credit is $2.9
billion and $228.1  million,  respectively.  At September 30, 2003, the carrying
value of the  Company's  standby  and  commercial  letters of  credit,  which is
included in "Other  liabilities"  on the condensed  consolidated  balance sheet,
total $5.8 million.

     The  Company  has  contingent   consideration   agreements  that  guarantee
additional  payments to acquired insurance  agencies'  shareholders based on the
agencies'  future  performance in excess of established  revenue and/or earnings
before interest,  taxes,  depreciation and amortization (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 former
shareholders.  As of September 30, 2003,  the Company has a maximum  exposure of
$10.5 million for these agreements, which expire March 2006.

     The  Company is fund  manager for limited  liability  corporations  issuing
low-income  housing  investments.  Low-income  housing  investments  provide tax
benefits to investors in the form of tax deductions  from  operating  losses and
tax credits. To facilitate the sale of these investments, the Company guarantees
the timely  completion of projects and delivery of tax benefits  throughout  the
investment  term.   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
investments that reduce the Company's ultimate exposure to loss. As of September
30, 2003,  the  Company's  maximum  exposure to loss under these  guarantees  is
limited to a return of investor capital and minimum  investment  yield, or $77.0
million. The Company maintains a liability of $3.0 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 trust preferred securities,  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 September 30, 2003,
the Bank had a maximum  exposure to loss under these  guarantees,  which have an
average term of less than one year, of $698.2 million.  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
September 30, 2003,  UnionBanCal  Corporation  had no exposure to loss for these
agreements.

NOTE 8--ACQUISITIONS

     On July 1, 2003,  the Company  completed  its  acquisition  of Monterey Bay
Bank, a savings and loan association  headquartered  in Watsonville,  California
and recorded  approximately $34 million in goodwill


                                       18
<PAGE>


                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                               SEPTEMBER 30, 2003
                                   (Unaudited)

NOTE 8--ACQUISITIONS (Continued)

and  approximately  $8 million in core  deposit  intangibles.  The core  deposit
intangibles will be amortized on an accelerated basis over their economic useful
life of a weighted average 5 years.

NOTE 9--SUBSEQUENT EVENTS AND PENDING ACQUISITIONS

     On September 25, 2003, the Company signed a definitive agreement to acquire
Business  Bancorp,  the parent  company of Business Bank of  California,  a $676
million asset  commercial  bank  headquartered  in San  Bernardino,  California.
Business Bank of California has  approximately 235 employees and 15 full-service
branches in two distinct markets:  the Southern California Inland Empire and the
San  Francisco  Bay Area.  The  Company  will pay between  approximately  $117.7
million and $134.9 million in cash and common stock. The transaction is expected
to be completed during the first quarter of 2004.

     On October 22,  2003,  the Board of  Directors  declared a  quarterly  cash
dividend  of $0.31 per  share of  common  stock.  The  dividend  will be paid on
January 2, 2004 to shareholders of record as of December 5, 2003.

     On October 24, 2003, UnionBanCal Corporation filed a registration statement
on Form S-3 with the  Securities and Exchange  Commission in connection  with an
offer  to be made to  current  and  former  participants  in the  Union  Bank of
California  401(k)  Plan to rescind  the  previous  purchases  made with  salary
deferral or rollover or after-tax contributions within the Plan from October 24,
2002  through  October  23,  2003,  of  up  to  450,775  shares  of  UnionBanCal
Corporation common stock.  UnionBanCal  Corporation is conducting the rescission
offer because it has  determined  that these shares of  UnionBanCal  Corporation
common  stock  may not  have  been  registered  in a  timely  manner  under  the
Securities Act of 1933.  Management does not believe that,  based on our current
estimates,  the amount required to fund payments under the rescission offer will
be material to the Company's financial position or results of operations.

     During October and November 2003,  Southern  California  suffered extensive
wildfires in the Counties of Los Angeles, Ventura, San Diego, San Bernardino and
Riverside.  These wildfires burned nearly 750,000 acres and damaged or destroyed
more than 3,500 homes and other  properties.  The fires have now been contained.
Based upon the information currently available,  including the effect that these
wildfires  have  had  on  the  Company's  Southern  California   facilities  and
operations,  and on collateral  securing  loans made by the Bank in the affected
areas,  management  does not believe that  wildfire  related  losses will have a
material effect on the Company's financial condition or results of operations.












                                       19
<PAGE>



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

     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 OTHER  UNITED  STATES  SECURITIES  AND  EXCHANGE
COMMISSION (SEC) FILINGS, PRESS RELEASES,  NEWS ARTICLES,  CONFERENCE CALLS WITH
WALL STREET  ANALYSTS  AND  SHAREHOLDERS  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,"  "ANTICIPATE,"  "INTEND,"  "PLAN,"
"ESTIMATE,"  "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 AT THE DATE SUCH  STATEMENTS ARE ISSUED.
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.

     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,  THE  FOLLOWING  FACTORS:  ADVERSE  ECONOMIC
CONDITIONS IN CALIFORNIA,  INCLUDING THE POSSIBLE IMPACT OF THE RECENT WILDFIRES
IN SOUTHERN CALIFORNIA, GLOBAL POLITICAL AND GENERAL ECONOMIC CONDITIONS RELATED
TO THE  TERRORIST  ATTACKS ON  SEPTEMBER  11,  2001,  AND THEIR  AFTERMATH,  THE
CONTINUING  HOSTILITIES IN IRAQ, ADVERSE ECONOMIC  CONDITIONS  AFFECTING CERTAIN
INDUSTRIES,  INCLUDING POWER COMPANIES AND THE AIRLINE INDUSTRY, FLUCTUATIONS IN
INTEREST RATES, THE CONTROLLING  INTEREST IN US OF THE BANK OF TOKYO-MITSUBISHI,
LTD.  (BTM),  WHICH IS A WHOLLY-OWNED  SUBSIDIARY OF MITSUBISHI  TOKYO FINANCIAL
GROUP,  INC.,  COMPETITION IN THE BANKING  INDUSTRY,  RESTRICTIONS ON DIVIDENDS,
ADVERSE   EFFECTS  OF  CURRENT  AND  FUTURE  BANKING  RULES,   REGULATIONS   AND
LEGISLATION,  AND  RISKS  ASSOCIATED  WITH  VARIOUS  STRATEGIES  WE MAY  PURSUE,
INCLUDING POTENTIAL ACQUISITIONS,  DIVESTITURES AND RESTRUCTURINGS. SEE ALSO THE
SECTION  ENTITLED  "CERTAIN  BUSINESS RISK FACTORS" LOCATED NEAR THE END OF THIS
"MANAGEMENT'S  DISCUSSION  AND  ANALYSIS OF FINANCIAL  CONDITION  AND RESULTS OF
OPERATIONS."

     ALL REPORTS THAT WE FILE  ELECTRONICALLY WITH THE SEC, INCLUDING THE ANNUAL
REPORT ON FORM 10-K OR  10-K/A,  QUARTERLY  REPORTS ON FORM  10-Q,  AND  CURRENT
REPORTS ON FORM 8-K, AS WELL AS ANY AMENDMENTS TO THOSE REPORTS,  ARE ACCESSIBLE
AT NO COST ON OUR  INTERNET  WEBSITE AT  WWW.UBOC.COM.  THESE  FILINGS  ARE ALSO
ACCESSIBLE ON THE SEC'S WEBSITE AT WWW.SEC.GOV.

INTRODUCTION

     We  are  a   California-based,   commercial   bank  holding   company  with
consolidated  assets of $42.6  billion at September  30, 2003.  On September 30,
2003, UnionBanCal Corporation changed its state of incorporation from California
to Delaware.  At September 30, 2003,  Union Bank of California,  N.A. (the Bank)
was the fourth largest commercial bank in California,  based on total assets and
total deposits in California.

     UnionBanCal   Corporation  and  its  banking  subsidiary,   Union  Bank  of
California,  N.A.,  were created on April 1, 1996, by the  combination  of Union
Bank with BanCal Tri-State  Corporation and its banking subsidiary,  The Bank of
California,  N.A. The  combination  was  accounted  for as a  reorganization  of
entities under common control, similar to a pooling of interests.

     Since November 1999, we have announced stock repurchase plans totaling $500
million  and as of  September  30,  2003  we  have  expended  $385  million.  We
repurchased  $86 million  and $45 million of common  stock in 2002 and the first
nine months of 2003,  respectively,  as part of these  repurchase  plans.  As of
September  30,  2003,  $115  million  of our  common  stock  is  authorized  for
repurchase.  In addition,  we purchased  $600 million of our common stock,  $300
million in August 2002 and $300  million in  September  2003,  from our majority
owner,  BTM. At September 30, 2003,  BTM owned  approximately  63 percent of our
outstanding common stock.


                                       20
<PAGE>



SUMMARY

     COMPARISON OF THREE MONTHS ENDED SEPTEMBER 30, 2002 AND SEPTEMBER 30, 2003

     Net income was $155.0  million,  or $1.02 per diluted common share,  in the
third quarter of 2003, compared with $138.2 million, or $0.88 per diluted common
share, in the third quarter of 2002. This increase in diluted earnings per share
of $0.14,  or 16  percent,  above the third  quarter  of 2002 was due to a $32.4
million,  or 19 percent,  increase in noninterest income, a $20.0 million, or 50
percent,  decrease in provision  for credit  losses,  and a $9.1  million,  or 2
percent, increase in net interest income (on a taxable-equivalent basis), offset
by a $31.0 million, or 10 percent, increase in noninterest expense, coupled with
a decrease in weighted average shares outstanding from share repurchases.  Other
highlights of the third quarter of 2003 include:

     o    Net interest income, on a taxable-equivalent basis, was $401.7 million
          in the third  quarter  of 2003,  an  increase  of $9.1  million,  or 2
          percent,  over the third quarter of 2002.  Net interest  margin in the
          third quarter of 2003 was 4.22 percent,  a decrease of 55 basis points
          from the third quarter of 2002.

     o    A provision  for credit  losses of $20.0  million was  recorded in the
          third quarter of 2003 compared with $40.0 million in the third quarter
          of 2002. This resulted from management's regular assessment of overall
          credit quality, loan portfolio composition,  and business and economic
          conditions  in  relation  to the  level of the  allowance  for  credit
          losses.  The allowance for credit  losses was $550.6  million,  or 161
          percent of total  nonaccrual  loans,  at September 30, 2003,  compared
          with $623.1  million,  or 158 percent of total  nonaccrual  loans,  at
          September 30, 2002.

     o    Noninterest income was $201.5 million in the third quarter of 2003, an
          increase of $32.4  million,  or 19 percent,  from the third quarter of
          2002.  This  increase  included a $13.2  million  increase  in service
          charges on deposit  accounts,  a $9.6  million  increase in  insurance
          commissions  mostly associated with our insurance agency  acquisitions
          and lower net losses of $5.6  million  for  commercial  loans held for
          sale, partially offset by a $3.6 million decrease in securities gains,
          net.

     o    Noninterest  expense was $348.9  million in the third quarter of 2003,
          an increase of $31.0 million, or 10 percent, over the third quarter of
          2002. This increase  included a $17.6 million increase in salaries and
          other   compensation,   which  was  primarily   attributable   to  our
          acquisitions and new branch openings, higher employee benefits of $5.4
          million and a $4.0 million increase in net occupancy expense.

     o    Income  tax  expense in the third  quarter of 2003 was $78.7  million,
          resulting  in a 34 percent  effective  income tax rate.  For the third
          quarter of 2002, the effective  income tax rate was 32 percent,  which
          included a $3.3 million net reduction to income tax expense  resulting
          from a change in tax law in the State of California concerning the tax
          treatment of loan loss reserves.

     o    Return  on  average  assets  decreased  to 1.47  percent  in the third
          quarter of 2003 compared to 1.53 percent in the third quarter of 2002.
          Our return on average  shareholders' equity increased to 16.04 percent
          in the third  quarter of 2003  compared to 14.38  percent in the third
          quarter of 2002.

     o    Total loans at September 30, 2003 were $26.0  billion,  an increase of
          $85.2 million from September 30, 2002.

     o    Nonperforming  assets were $344.3  million at  September  30,  2003, a
          decrease of $51.2  million,  or 13 percent,  from  September 30, 2002.
          Nonperforming  assets,  as a percentage of total assets,  decreased to
          0.81 percent at  September  30,  2003,  compared  with 1.05 percent at
          September  30,  2002.  The ratio of  nonaccrual  loans to total  loans
          decreased to 1.31  percent at September  30, 2003 from 1.52 percent at
          September 30, 2002.

     o    Our Tier 1 and total risk-based  capital ratios were 10.96 percent and
          12.58  percent,  respectively,  at September  30, 2003,  compared with
          11.14 percent and 12.89 percent,  respectively, at September 30,


                                       21
<PAGE>




          2002.  Our  leverage  ratio was 8.73  percent at  September  30, 2003,
          compared with 10.13 percent at September 30, 2002.

     COMPARISON OF NINE MONTHS ENDED SEPTEMBER 30, 2002 AND SEPTEMBER 30, 2003

     Net income was $435.3  million,  or $2.87 per diluted common share,  in the
first nine months of 2003,  compared with $383.0  million,  or $2.43 per diluted
common  share,  in the first  nine  months of 2002.  This  increase  in  diluted
earnings per share of $0.44, or 18 percent,  above the first nine months of 2002
was due to a $85.9 million,  or 17 percent,  increase in noninterest  income,  a
$70.0 million,  or 48 percent,  decrease in provision for credit  losses,  and a
$19.7  million,   or  2  percent,   increase  in  net  interest   income  (on  a
taxable-equivalent basis), offset by a $96.4 million, or 10 percent, increase in
noninterest  expense;  coupled  with  a  decrease  in  weighted  average  shares
outstanding due to share repurchases.  Other highlights of the first nine months
of 2003 include:

     o    Net interest income, on a taxable-equivalent  basis, was $1.18 billion
          in the first nine months of 2003, an increase of $19.7  million,  or 2
          percent,  over the first nine months of 2002.  Net interest  margin in
          the first nine months of 2003 was 4.35 percent, a decrease of 42 basis
          points from the first nine months of 2002.

     o    A provision  for credit  losses of $75.0  million was  recorded in the
          first nine months of 2003  compared  with $145.0  million in the first
          nine  months  of  2002.  This  resulted  from   management's   regular
          assessment of overall credit quality, loan portfolio composition,  and
          business  and  economic  conditions  in  relation  to the level of the
          allowance for credit losses.

     o    Noninterest  income  was $590.4  million  in the first nine  months of
          2003, an increase of $85.9 million, or 17 percent, from the first nine
          months of 2002.  This increase  included a $27.4  million  increase in
          service  charges on deposit  accounts,  a $25.1  million  increase  in
          insurance  commissions  mostly  associated  with our insurance  agency
          acquisitions, lower writedowns on private capital investments of $13.6
          million,  lower  residual  value  writedowns  on auto  leases  of $9.0
          million,  lower net losses of $8.0 million for  commercial  loans held
          for sale and a $4.1 million  increase in net  securities  gains mainly
          attributable  to a $9.0  million gain arising from the early call of a
          Mexican Brady Bond, partly offset by an $8.4 million decrease in trust
          and investment management fees.

     o    Noninterest  expense  was $1.04  billion in the first  nine  months of
          2003, an increase of $96.4 million, or 10 percent, over the first nine
          months of 2002.  This  increase  included  higher  salaries  and other
          compensation of $35.6 million,  mostly related to our acquisitions and
          new branch openings,  higher employee  benefits of $19.4 million and a
          $16.1 million increase in net occupancy expense.

     o    Income  tax  expense  in the  first  nine  months  of 2003 was  $215.3
          million,  resulting in a 33 percent effective income tax rate. For the
          first nine months of 2002,  the effective  income tax rate was also 33
          percent.

     o    Return on average  assets  increased  slightly to 1.45  percent in the
          first nine months of 2003  compared to 1.44  percent in the first nine
          months of 2002. Our return on average  shareholders'  equity increased
          to 15.02  percent in the first nine  months of 2003  compared to 13.73
          percent in the first nine months of 2002.

BUSINESS SEGMENTS

     We  segregate  our  operations  into four  primary  business  units for the
purpose of management  reporting,  as shown in the table on the following  page.
The results show the financial performance of our major business units.

     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 risk, market risk and operational
risk.  Credit risk is the potential loss in economic value due to the likelihood
that the


                                       22
<PAGE>



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 failures  in internal  control,
system failures, or external events.

     The following  tables  reflect the condensed  income  statements,  selected
average  balance  sheet  items and  selected  financial  ratios  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 tables  have been  expanded  to include
performance center earnings.  A performance center is a special unit of the Bank
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
Global Markets  Trading and Sales unit,  within the Global  Markets Group,  is a
performance  center that manages the foreign  exchange,  derivatives,  and fixed
income  securities  activities  within the Global Markets  organization.  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 to 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 assigned
to the business units based on a predetermined percentage of usage.
















                                       23
<PAGE>



     We have restated  certain  business units' results for the prior periods to
reflect certain transfer pricing changes and any reorganization changes that may
have occurred.

<TABLE>
<CAPTION>

                                                    COMMUNITY BANKING
                                                      AND INVESTMENT             COMMERCIAL FINANCIAL          INTERNATIONAL
                                                         SERVICES                   SERVICES GROUP             BANKING GROUP
                                                  -----------------------       ---------------------     ------------------------
                                                                  AS OF AND FOR THE THREE MONTHS ENDED SEPTEMBER 30,
                                                  --------------------------------------------------------------------------------
                                                    2002           2003           2002         2003          2002           2003
                                                  --------      ---------       --------     --------     ----------    ----------
<S>                                               <C>           <C>             <C>          <C>          <C>           <C>
RESULTS OF OPERATIONS AFTER PERFORMANCE
  CENTER EARNINGS (DOLLARS IN THOUSANDS):
   Net interest income............................$197,080      $ 231,992       $173,635     $219,812     $    9,153    $   10,545
   Noninterest income.............................  96,823        110,908         47,290       67,591         17,268        18,117
                                                  --------      ---------       --------     --------     ----------    ----------
   Total revenue.................................. 293,903        342,900        220,925      287,403         26,421        28,662
   Noninterest expense............................ 175,543        202,269         99,091      103,182         15,746        15,418
   Credit expense (income)........................   7,528          7,996         47,215       39,397            474           511
                                                  --------      ---------       --------     --------     ----------    ----------
   Income (loss) before income tax
     expense (benefit)............................ 110,832        132,635         74,619      144,824         10,201        12,733
   Income tax expense (benefit)...................  42,393         50,733         23,485       49,002          3,902         4,870
                                                  --------      ---------       --------     --------     ----------    ----------
   Net income (loss)..............................$ 68,439      $  81,902       $ 51,134     $ 95,822     $    6,299    $    7,863
                                                  ========      =========       ========     ========     ==========    ==========
PERFORMANCE CENTER EARNINGS (DOLLARS
  IN THOUSANDS):
   Net interest income............................$    162      $     163       $   (252)    $    (77)    $       --    $       10
   Noninterest income............................. (12,116)       (10,963)        16,308       17,739          1,098           305
   Noninterest expense............................  (9,409)        (9,188)         8,572        9,774            860            59
   Net income (loss)..............................  (1,588)        (1,013)         4,661        4,909            147           158
   Total loans (dollars in millions)..............      23             24            (42)         (43)            --            --
AVERAGE BALANCES (DOLLARS IN MILLIONS):
   Total loans(1).................................$ 10,154      $  11,801       $ 14,208     $ 12,483     $    1,219    $    1,457
   Total assets...................................  10,920         12,904         16,016       14,347          1,547         1,913
   Total deposits(1)..............................  14,820         17,456          9,789       13,767          1,358         1,555
FINANCIAL RATIOS:
   Risk adjusted return on capital(2).............      47%            45%            13%          24%            37%           50%
   Return on average assets(2)....................    2.49           2.52           1.27         2.65           1.62          1.63
   Efficiency ratio(3)............................    59.7           59.0           44.9         35.9           59.6          53.8

</TABLE>

<TABLE>
<CAPTION>


                                                           GLOBAL                                               UNIONBANCAL
                                                       MARKETS GROUP                    OTHER                   CORPORATION

                                                                      AS OF AND FOR THE THREE MONTHS ENDED SEPTEMBER 30,

                                                    2002           2003           2002         2003          2002         2003
                                                  --------      ---------       --------     --------     ----------    ----------
<S>                                               <C>           <C>             <C>          <C>          <C>           <C>
RESULTS OF OPERATIONS AFTER PERFORMANCE CENTER
   EARNINGS (DOLLARS IN THOUSANDS):
   Net interest income........................... $ (6,763)     $ (78,254)      $ 18,997     $ 16,994     $  392,102    $  401,089
   Noninterest income............................    2,561         (1,097)         5,174        5,951        169,116       201,470
                                                  --------      ---------       --------     --------     ----------    ----------
   Total revenue.................................   (4,202)       (79,351)        24,171       22,945        561,218       602,559
   Noninterest expense...........................    3,756          3,926         23,688       24,066        317,824       348,861
   Credit expense (income).......................       50             50        (15,267)     (27,954)        40,000        20,000
                                                  --------      ---------       --------     --------     ----------    ----------
   Income (loss) before income tax expense
     (benefit)...................................   (8,008)       (83,327)        15,750       26,833        203,394       233,698
   Income tax expense (benefit)..................   (3,063)       (31,872)        (1,554)       5,920         65,163        78,653
                                                  --------      ---------       --------     --------     ----------    ----------
   Net income (loss)............................. $ (4,945)     $ (51,455)      $ 17,304     $ 20,913     $  138,231    $  155,045
                                                  ========      =========       ========     ========     ==========    ==========
PERFORMANCE CENTER EARNINGS (DOLLARS IN
  THOUSANDS):
   Net interest income........................... $     --      $    (203)      $     90     $    107     $       --    $       --
   Noninterest income............................   (8,578)       (10,605)         3,288        3,524             --            --
   Noninterest expense...........................   (1,534)        (2,123)         1,511        1,478             --            --
   Net income (loss).............................   (4,349)        (5,362)         1,129        1,308             --            --
   Total loans (dollars in millions).............       --             --             19           19             --            --
AVERAGE BALANCES (DOLLARS IN MILLIONS):
   Total loans(1)................................ $    103      $     333       $    287     $    258     $   25,971    $   26,332
   Total assets..................................    6,562         11,506            758        1,244         35,803        41,914
   Total deposits(1).............................    1,496            837            992        1,288         28,455        34,903
FINANCIAL RATIOS:
   Risk adjusted return on capital(2)............       (2)%          (21)%           na           na             na            na
   Return on average assets(2)...................    (0.30)         (1.77)            na           na           1.53%         1.47%
   Efficiency ratio(3)...........................       na             na             na           na           56.6          57.8


---------------------------
<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),  as a percentage of net interest  income and noninterest
     income.

na = not applicable
</FN>

</TABLE>

                                       24
<PAGE>

<TABLE>
<CAPTION>


                                                     COMMUNITY BANKING
                                                       AND INVESTMENT           COMMERCIAL FINANCIAL           INTERNATIONAL
                                                          SERVICES                  SERVICES GROUP             BANKING GROUP
                                                  -----------------------       ---------------------     ------------------------
                                                                  AS OF AND FOR THE NINE MONTHS ENDED SEPTEMBER 30,
                                                  --------------------------------------------------------------------------------
                                                    2002           2003           2002         2003          2002          2003
                                                  --------      ---------       --------     --------     ----------    ----------
<S>                                               <C>           <C>             <C>          <C>          <C>           <C>
RESULTS OF OPERATIONS AFTER PERFORMANCE CENTER
EARNINGS (DOLLARS IN THOUSANDS):
   Net interest income............................$567,837      $ 650,542       $499,248     $616,175     $   28,024    $   30,593
   Noninterest income............................. 280,221        324,367        150,268      187,055         49,988        59,690
                                                  --------      ---------       --------     --------     ----------    ----------
   Total revenue.................................. 848,058        974,909        649,516      803,230         78,012        90,283
   Noninterest expense............................ 524,327        599,386        285,795      307,622         46,155        45,600
   Credit expense (income)........................  25,419         23,778        141,735      124,004          1,428         1,563
                                                  --------      ---------       --------     --------     ----------    ----------
   Income (loss) before income tax expense
    (benefit)..................................... 298,312        351,745        221,986      371,604         30,429        43,120
   Income tax expense (benefit)................... 114,104        134,543         70,463      122,843         11,639        16,493
                                                  --------      ---------       --------     --------     ----------    ----------
   Net income (loss)..............................$184,208      $ 217,202       $151,523     $248,761     $   18,790    $   26,627
                                                  ========      =========       ========     ========     ==========    ==========
PERFORMANCE CENTER EARNINGS (DOLLARS IN
THOUSANDS):
   Net interest income............................$    606      $     531       $   (924)    $   (444)    $       --    $       24
   Noninterest income............................. (36,788)       (32,040)        45,845       49,627          3,140           890
   Noninterest expense............................ (28,153)       (26,415)        24,797       27,585          2,487           394
   Net income (loss)..............................  (5,042)        (3,203)        12,580       13,462            403           321
   Total loans (dollars in millions)..............      25             25            (45)         (45)            --            --
AVERAGE BALANCES (DOLLARS IN MILLIONS):
   Total loans(1).................................$  9,896      $  11,383       $ 14,160     $ 13,025     $    1,095    $    1,529
   Total assets...................................  10,663         12,392         15,925       15,028          1,421         1,948
   Total deposits(1)..............................  14,338         16,560          9,328       12,461          1,493         1,515
FINANCIAL RATIOS:
   Risk adjusted return on capital(2).............      43%            43%            13%          20%            39%           57%
   Return on average assets(2)....................    2.31           2.34           1.27         2.21           1.77          1.83
   Efficiency ratio(3)............................    61.8           61.5           44.0         38.3           59.2          50.5

</TABLE>

<TABLE>
<CAPTION>

                                                          GLOBAL                                                UNIONBANCAL
                                                       MARKETS GROUP                    OTHER                   CORPORATION
                                                  -----------------------       ---------------------     ------------------------
                                                                 AS OF AND FOR THE NINE MONTHS ENDED SEPTEMBER 30,
                                                  --------------------------------------------------------------------------------
                                                    2002           2003           2002         2003          2002          2003
                                                  --------      ---------       --------     --------     ----------    ----------
<S>                                               <C>           <C>             <C>          <C>          <C>           <C>
RESULTS OF OPERATIONS AFTER PERFORMANCE
   CENTER EARNINGS (DOLLARS IN THOUSANDS):
   Net interest income....................        $  5,955      $(172,029)      $ 57,239     $ 52,365     $1,158,303    $1,177,646
   Noninterest income.....................           8,788          2,311         15,200       16,989        504,465       590,412
                                                   --------      ---------       --------     --------     ----------    ----------
   Total revenue..........................          14,743       (169,718)        72,439       69,354      1,662,768     1,768,058
   Noninterest expense....................          11,677         11,726         78,148       78,131        946,102     1,042,465
   Credit expense (income)................             150            150        (23,732)     (74,495)       145,000        75,000
                                                   --------      ---------       --------     --------     ----------    ----------
   Income (loss) before income tax expense
   (benefit)..............................           2,916       (181,594)        18,023       65,718        571,666       650,593
   Income tax expense (benefit)...........           1,115        (69,459)        (8,605)      10,853        188,716       215,273
                                                   --------      ---------       --------     --------     ----------    ----------
   Net income (loss)......................        $  1,801      $(112,135)      $ 26,628     $ 54,865     $  382,950    $  435,320
                                                  ========      =========       ========     ========     ==========    ==========
PERFORMANCE CENTER EARNINGS (DOLLARS IN
   THOUSANDS):
   Net interest income....................        $     --      $    (433)      $    318     $    322     $       --    $       --
   Noninterest income.....................         (22,146)       (28,553)         9,949       10,076             --            --
   Noninterest expense....................          (3,766)        (5,776)         4,635        4,212             --            --
   Net income (loss)......................         (11,350)       (14,332)         3,409        3,752             --            --
   Total loans (dollars in millions)......              --             --             20           20             --            --
AVERAGE BALANCES (DOLLARS IN MILLIONS):
   Total loans(1).........................        $     91      $     279       $    320     $    307     $   25,562    $   26,523
   Total assets...........................           6,729          9,655            804        1,003         35,542        40,026
   Total deposits(1)......................           1,991          1,037            935        1,297         28,085        32,870
FINANCIAL RATIOS:
   Risk adjusted return on capital(2).....              --%           (15)%           na           na             na            na
   Return on average assets(2)............            0.04          (1.55)            na           na           1.44%         1.45%
   Efficiency ratio(3)....................            79.2             na             na           na           56.8          58.9


-------------------------------
<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),  as a percentage of net interest  income and noninterest
     income.

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


                                       25

<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.

     In the third quarter of 2003, net income  increased  $13.5  million,  or 20
percent,  compared to the third quarter of 2002.  Total revenue  increased $49.0
million, or 17 percent, compared to a year earlier.  Increased asset and deposit
volumes  offset the effect of a lower  interest rate  environment  leading to an
increase of $34.9 million,  or 18 percent, in net interest income over the prior
year.  Excluding the impact of performance  center earnings,  noninterest income
was $12.9  million,  or 12 percent,  higher than the prior year primarily due to
our  acquisitions of John Burnham & Company,  in the fourth quarter of 2002, and
Tanner  Insurance  Brokers,  Inc.,  in the second  quarter  of 2003,  and higher
deposit-related service fees. Noninterest expense increased $26.7 million, or 15
percent,  in the third  quarter of 2003  compared to the third  quarter of 2002,
with the majority of that increase  being  attributable  to higher  salaries and
employee  benefits  mainly related to  acquisitions,  deposit  gathering,  small
business growth and residential loan growth over the third quarter of 2002.

     In 2003, the Community  Banking and Investment  Services Group continues to
emphasize  growing the consumer asset  portfolio,  expanding  wealth  management
services, extending the small business franchise,  expanding the branch network,
and expanding  cross selling  activities  throughout  the Bank. The strategy for
growing the  consumer  asset  portfolio  primarily  focused on mortgage and home
equity products that may be originated  through the branch  network,  as well as
through channels such as wholesalers,  correspondents, and whole loan purchases.
As of September 30, 2003,  residential  mortgages have grown by $1.3 billion, or
21 percent,  from the prior year. The Wealth  Management  division is focused on
becoming a growing  provider of banking and  investment  products  for  affluent
individuals in geographic areas already served by us. We seek to provide quality
service  superior  to  that  of our  competitors  and  offer  our  customers  an
attractive  product  suite.  Core elements of the initiative to extend our small
business  franchise  include  improving  our sales force,  increasing  marketing
activities,   adding  new  locations,  and  developing  online  capabilities  to
complement physical distribution.  Expansion of the distribution network will be
achieved through acquisitions and new branch openings. During 2002, we completed
our acquisitions of Valencia Bank and Trust, a commercial bank with $266 million
in assets and five branches, and First Western Bank, a commercial bank with $224
million  in  assets  and seven  branches.  On July 1,  2003,  we  completed  the
acquisition  of  Monterey  Bay  Bank,  a $632  million  asset  savings  and loan
association  headquartered in Watsonville,  California,  with eight full-service
branches in the Greater Monterey Bay area.

     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 Insurance Services.

     COMMUNITY BANKING serves its customers through 278 full-service branches in
California,  4 full-service branches in Oregon and Washington,  and a network of
547 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 on-line 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;


                                       26
<PAGE>



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

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

     WEALTH  MANAGEMENT  provides  private  banking  services  to  our  affluent
clientele as well as brokerage products and services.

     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.

     o    Our  brokerage   products  and  services  are  provided  through  UBOC
          Investment  Services,   Inc.,  a  registered   broker/dealer  offering
          investment  products to individuals  and  institutional  clients.  Its
          primary strategy is to further penetrate our existing client base.

     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 services to institutional clients and its
          proprietary  mutual funds,  the  affiliated  HighMark  Funds.  It also
          provides advisory services to Union Bank of California, N.A. trust and
          agency clients, including corporations, pension funds and individuals.
          HighMark  Capital  Management,  Inc. also provides mutual fund support
          services. 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.  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 our position in our target markets.

     CONSUMER   ASSET   MANAGEMENT   provides  the   centralized   underwriting,
processing,   servicing,  collection  and  administration  for  consumer  assets
including residential loans and merchant bank cards.

     o    Consumer Asset Management is centralized in two California  sites, one
          in San Diego and one in Brea, and

     o    provides  customer and credit  management  services for consumer  loan
          products.

               CERTAIN INDUSTRY DEVELOPMENTS

               In 1996,  Wal-Mart Stores,  Inc. and several other retailers sued
               MasterCard International  Incorporated ("MCI"), VISA U.S.A., Inc.
               and VISA  International,  Inc.  (together,  "VISA")  in cases now
               pending  in  federal  court in New York,  asserting  that MCI and
               VISA's  rules  regarding  uniform  acceptance  of  all  VISA  and
               MasterCard   credit  and  debit  cards  were  an  illegal   tying
               arrangement.

               Prior to trial,  MCI and VISA agreed to settle these  cases.  The
               settlements reportedly remain subject to court approval.  Neither
               we nor Union Bank of California, N.A. are a party to


                                       27
<PAGE>


               these  suits,  and  neither  will be  directly  liable  for these
               settlements.  However,  MCI or VISA may seek to assess, or assert
               claims   against,   their  members   (including   Union  Bank  of
               California, N.A.) to fund the settlements.

               While our debit card  interchange  income  declined  slightly  in
               2003, our  interchange  income from debit card operations is less
               than one  percent of our total  revenue.  We cannot  predict  the
               effect that the  settlements,  regardless of a direct claim being
               asserted   against   members,   will  have  on  the   competitive
               environment or our future earnings from debit card operations.

     INSURANCE  SERVICES  provides  a range  of  risk  management  services  and
insurance  products to business and retail customers.  The group, which includes
our 2001 acquisition of Armstrong/Robitaille, Inc., our 2002 acquisition of John
Burnham & Company,  and our 2003 acquisition of Tanner Insurance Brokers,  Inc.,
offers its risk management and insurance  products through offices in California
and Oregon.

     Through alliances with other financial institutions,  the Community Banking
and Investment Services Group offers additional  products and services,  such as
credit 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
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. The group's primary competitors
are other  major  depository  institutions  such as Bank of  America,  Citibank,
Washington  Mutual and Wells Fargo,  as well as smaller  community  banks in the
markets in which we operate.

     COMMERCIAL FINANCIAL SERVICES GROUP

     The  Commercial   Financial   Services  Group  offers  financing  and  cash
management  services to middle-market and large corporate  businesses  primarily
headquartered in the western United States.  The Commercial  Financial  Services
Group  has  continued  to focus  specialized  financing  expertise  to  specific
geographic markets and industry segments such as energy, entertainment, and real
estate. Relationship managers in the Commercial Financial Services Group 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 its customers access
to cash management  services  delivered through deposit managers with experience
in cash management solutions for businesses and government entities.

     In the third quarter of 2003, net income  increased  $44.7  million,  or 87
percent,  compared to the third quarter of 2002. Net interest  income  increased
$46.2 million, or 27 percent, partially attributable to the impact of increasing
deposit  balances and a lower cost of funds  resulting  from the lower  interest
rate  environment.  Beginning  in 2003,  the transfer  pricing  credit for funds
provides for a floor on analyzed  demand  deposit  account  balances,  which was
triggered  during  the first  quarter of 2003.  Had such a floor  existed in the
third quarter of 2002,  net interest  income would have been  approximately  $13
million higher.  Excluding higher income in the private equity portfolio of $3.4
million mainly related to lower writedowns on private capital investments in the
third quarter of 2003 compared to the third quarter of 2002,  noninterest income
increased  $16.9  million,  or 34 percent.  This 34 percent  increase was mainly
attributable  to  higher  deposit-related   service  fees.  Noninterest  expense
increased $4.1 million,  or 4 percent,  compared to a year earlier due to higher
expenses to support increased  product sales and deposit volume.  Credit


                                       28
<PAGE>


expense decreased $7.8 million mainly  attributable to a refinement in the RAROC
allocation   of  capital   and   expected   losses   and  lower  loan   balances
year-over-year.

     The group's  initiatives  during 2003 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,  commercial real estate, energy, entertainment,
equipment  leasing and commercial  finance.  The Commercial  Financial  Services
Group provides  strong  processing  services,  including  services such as check
processing, front-end item processing, cash vault services and digital imaging.

     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 Corporate Deposit and Treasury Management Division, which provides
          deposit and cash management expertise to clients in the middle-market,
          large   corporate   market,   government   agencies  and   specialized
          industries;

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

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

     o    the  Corporate  Capital  Markets   Division,   which  provides  custom
          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  competes with other banks  primarily on the basis of the quality
of its relationship  managers, the delivery of quality customer service, and its
reputation as a "business bank."

     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 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

     The   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
financing  of  mostly  short-term  transactions.  The  majority  of the  revenue
generated by the International Banking Group is from customers domiciled outside
of the US.

     In the third quarter of 2003,  net income  increased  $1.6  million,  or 25
percent,  compared  to the third  quarter  of 2002.  Total  revenue in the third
quarter of 2003  increased  $2.2  million,  or 8 percent,  compared to the third
quarter of 2002. Net interest income increased $1.4 million, or 15 percent, from
the third quarter of 2002,  mainly  attributable to both higher deposit and loan
volumes.  Noninterest  income was $0.9  million,  or 5 percent,  higher than the
third quarter of 2002 reflecting growth in international  remittance and account
analysis fees.  Noninterest  expense of $15.4 million was  relatively  unchanged
from the third quarter of 2002.  Credit  expense of $0.5 million was  relatively
unchanged  from the third quarter of 2002.  The  International  Banking  Group's
business  revolves around  short-term  trade financing,  mostly to


                                       29
<PAGE>



banks,  which provides  service-related  income, as well as significantly  lower
credit risk when compared to other lending activities.

     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 market. The International Banking Group,  headquartered in
San Francisco,  also maintains  representative offices in Asia and Latin America
and an international banking subsidiary in New York.

     GLOBAL MARKETS GROUP

     The Global Markets Group conducts business activities  primarily to support
the previously described business groups and their customers.  This group offers
a broad range of risk management  products,  such as foreign exchange  contracts
and interest rate swaps and options. It trades money market, government, agency,
and other securities to meet investment needs of our  institutional and business
clients.  Another  primary  area of the  group is  treasury  management  for the
Company,  which encompasses wholesale funding,  liquidity  management,  interest
rate risk management,  including  securities portfolio  management,  and hedging
activities.  The Global  Markets  Group  results  include the  transfer  pricing
activity for the Bank, which allocates to the other business segments their cost
of  funds  on all  asset  categories  or  credit  for  funds  in the case of all
liability categories.

     In the third quarter of 2003, net loss was $51.5 million  compared to a net
loss of $4.9 million in the third  quarter of 2002.  Total  revenue in the third
quarter of 2003  decreased by $75.1  million,  compared to the third  quarter of
2002,  resulting  from a $71.5  million  decrease in net  interest  income.  The
decrease in net interest income was primarily  attributable to a higher transfer
pricing  residual  in the third  quarter of 2003  resulting  from  significantly
higher  quarter-over-prior year quarter growth in deposits,  which are priced on
longer-term  liability rates,  compared to credits on earning assets,  which are
priced on shorter-term  lending rates.  Beginning in 2003, the transfer  pricing
credit  for  funds  provides  for a floor on  analyzed  demand  deposit  account
balances,  which was triggered  during the first quarter 2003.  Had such a floor
existed in the third quarter of 2002, net interest income would have declined by
approximately $13 million.  Noninterest income was $3.7 million, or 143 percent,
lower than the third  quarter  of 2002,  mainly  attributable  to losses of $2.3
million on the sale of available  for sale  securities  in the third  quarter of
2003. Compared to the third quarter of 2002, noninterest expense of $3.9 million
in the third quarter of 2003 was relatively unchanged.

     OTHER

     "Other" includes the following items:

     o    corporate activities that are not directly  attributable to one of the
          four major business units. Included in this category are certain other
          nonrecurring  items such as merger and  integration  expense,  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;

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

     o    the Pacific Rim Corporate Group,  with assets at September 30, 2003 of
          $295 million, which offers a range of credit,  deposit, and investment
          management  products  and  services to  companies in the US, which are
          affiliated with companies headquartered in Japan; and

     o    the residual costs of support groups.


                                       30
<PAGE>


     Net income for "Other" in the third quarter of 2003 was $20.9 million.  The
results were impacted by the following factors:

     o    Credit expense  (income) of ($28.0)  million was due to the difference
          between the $20.0 million in provision  for credit  losses  calculated
          under our US GAAP methodology and the $48.0 million in expected losses
          for  the  reportable  business  segments,  which  utilizes  the  RAROC
          methodology;

     o    Net  interest  income  of  $17.0  million,  which  resulted  from  the
          differences  between the credit for equity for the reportable segments
          under  RAROC  and  the  net  interest  income  earned  by  UnionBanCal
          Corporation,  and a credit for  deposits in the Pacific Rim  Corporate
          Group;

     o    Noninterest income of $6.0 million; and

     o    Noninterest expense of $24.1 million.

     Net income for "Other" in the third quarter of 2002 was $17.3 million.  The
results were impacted by the following factors:

     o    Credit expense  (income) of ($15.3)  million was due to the difference
          between the $40.0 million in provision  for credit  losses  calculated
          under our US GAAP methodology and the $55.3 million in expected losses
          for  the  reportable  business  segments,  which  utilizes  the  RAROC
          methodology; offset by

     o    Net  interest  income  of  $19.0  million,  which  resulted  from  the
          differences  between the credit for equity for the reportable segments
          under  RAROC  and  the  net  interest  income  earned  by  UnionBanCal
          Corporation,  and a credit for  deposits in the Pacific Rim  Corporate
          Group;

     o    Noninterest income of $5.2 million; and

     o    Noninterest expense of $23.7 million.
















                                       31
<PAGE>


NET INTEREST INCOME

     The following  tables show the major  components of net interest income and
net interest margin.

<TABLE>
<CAPTION>

                                                                   FOR THE THREE MONTHS ENDED
                                          -------------------------------------------------------------------------------
                                                    SEPTEMBER 30, 2002                       SEPTEMBER 30, 2003
                                          ------------------------------------      -------------------------------------
                                                           INTEREST    AVERAGE                        INTEREST    AVERAGE
                                            AVERAGE        INCOME/      YIELD/        AVERAGE         INCOME/      YIELD/
(DOLLARS IN THOUSANDS)                      BALANCE       EXPENSE(1)   RATE(1)        BALANCE        EXPENSE(1)   RATE(1)
----------------------------------------- -----------     ----------   -------      -----------      ----------   -------
<S>                                       <C>             <C>             <C>       <C>              <C>             <C>
ASSETS
Loans:(2)
   Domestic.............................. $24,770,565     $  374,043      6.00%     $24,858,766      $  342,629      5.48%
   Foreign(3)............................   1,200,918          8,134      2.69        1,473,220           7,581      2.04
Securities--taxable......................   5,907,792         76,825      5.20        9,928,708          92,553      3.73
Securities--tax-exempt...................      35,761            990     11.08           40,592           1,015     10.00
Interest bearing deposits in banks.......     135,952            773      2.26          246,897             922      1.48
Federal funds sold and securities
   purchased under resale agreements.....     327,820          1,467      1.78          980,271           2,532      1.02
Trading account assets...................     378,715          1,415      1.48          327,415             909      1.10
                                          -----------     ----------                -----------      ----------
          Total earning assets...........  32,757,523        463,647      5.63       37,855,869         448,141      4.71
                                                          ----------                                 ----------
Allowance for credit losses..............    (631,581)                                 (570,773)
Cash and due from banks..................   1,860,183                                 2,324,389
Premises and equipment, net..............     497,542                                   510,205
Other assets.............................   1,319,808                                 1,793,825
                                          -----------                               -----------
          Total assets................... $35,803,475                               $41,913,515
                                          ===========                               ===========
LIABILITIES
Domestic deposits:
   Interest bearing...................... $ 8,292,080         22,855      1.09      $10,952,652          16,586      0.60
   Savings and consumer time.............   3,614,192         14,593      1.60        4,116,669           9,990      0.96
   Large time............................   2,679,594         14,601      2.16        2,303,754           8,408      1.45
Foreign deposits(3)......................   1,369,123          4,727      1.37        1,200,668           1,991      0.66
                                          -----------     ----------                -----------      ----------
          Total interest bearing deposits  15,954,989         56,776      1.41       18,573,743          36,975      0.79
                                          -----------     ----------                -----------      ----------
Federal funds purchased and securities
   sold under repurchase agreements......     487,201          1,789      1.46          393,772             689      0.69
Commercial paper.........................   1,043,111          4,488      1.71          781,552           1,723      0.87
Other borrowed funds.....................     270,795          1,662      2.44          262,512           1,673      2.53
Medium and long-term debt................     399,697          2,375      2.36          399,761           1,738      1.73
UnionBanCal Corporation--obligated
   mandatorily redeemable preferred
   securities of subsidiary grantor trust     351,879          3,921      4.48          351,575           3,607      4.10
                                          -----------     ----------                -----------      ----------
          Total borrowed funds...........   2,552,683         14,235      2.22        2,189,172           9,430      1.71
                                          -----------     ----------                -----------      ----------
          Total interest bearing
          liabilities....................  18,507,672         71,011      1.52       20,762,915          46,405      0.89
                                                          ----------                                 ----------
Noninterest bearing deposits.............  12,500,463                                16,329,221
Other liabilities........................     980,413                                   986,545
                                          -----------                               -----------
          Total liabilities..............  31,988,548                                38,078,681
SHAREHOLDERS' EQUITY
Common equity............................   3,814,927                                 3,834,834
                                          -----------                               -----------
          Total shareholders' equity.....   3,814,927                                 3,834,834
                                          -----------                               -----------
          Total liabilities and
          shareholders' equity........... $35,803,475                               $41,913,515
                                          ===========                               ===========
Net interest income/margin
   (taxable-equivalent basis)............                    392,636      4.77%                         401,736      4.22%
Less: taxable-equivalent adjustment......                        534                                        647
                                                          ----------                                 ----------
          Net interest income............                 $  392,102                                 $  401,089
                                                          ==========                                 ==========

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

(1)  Yields and  interest  income are  presented on a  taxable-equivalent  basis
     using the federal statutory tax rate of 35 percent.

(2)  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.

(3)  Foreign  loans and  deposits  are those loans and  deposits  originated  in
     foreign branches.

</FN>
</TABLE>


                                       32
<PAGE>

<TABLE>
<CAPTION>

                                                                       FOR THE NINE MONTHS ENDED
                                          -------------------------------------------------------------------------------
                                                    SEPTEMBER 30, 2002                        SEPTEMBER 30, 2003
                                          ------------------------------------      -------------------------------------
                                                           INTEREST    AVERAGE                        INTEREST    AVERAGE
                                            AVERAGE         INCOME/     YIELD/        AVERAGE          INCOME/     YIELD/
(DOLLARS IN THOUSANDS)                      BALANCE       EXPENSE(1)   RATE(1)        BALANCE        EXPENSE(1)   RATE(1)
----------------------------------------- -----------     ----------   -------      -----------      ----------   -------
<S>                                       <C>             <C>             <C>       <C>              <C>             <C>
ASSETS
 Loans:(2)
   Domestic.............................. $24,468,284     $1,113,279      6.08%     $24,986,259      $1,043,906      5.58%
   Foreign(3)............................   1,094,168         23,642      2.89        1,536,428          24,742      2.15
 Securities--taxable.....................   5,678,095        235,041      5.52        8,220,231         249,073      4.04
 Securities--tax-exempt..................      36,971          2,979     10.75           41,168           3,045      9.86
 Interest bearing deposits in banks......     113,779          1,898      2.23          223,937           3,014      1.80
 Federal funds sold and securities
   purchased under resale agreements.....     782,607         10,354      1.77          932,496           8,210      1.18
 Trading account assets..................     298,505          3,107      1.39          322,952           2,847      1.18
                                          -----------     ----------                -----------      ----------
        Total earning assets.............  32,472,409      1,390,300      5.72       36,263,471       1,334,837      4.92
                                                          ----------                                 ----------
 Allowance for credit losses.............    (635,313)                                 (586,418)
 Cash and due from banks.................   1,878,616                                 2,173,775
 Premises and equipment, net.............     497,503                                   508,859
 Other assets............................   1,328,587                                 1,666,062
                                          -----------                               -----------
        Total assets..................... $35,541,802                               $40,025,749
                                          ===========                               ===========
 LIABILITIES
 Domestic deposits:
   Interest bearing...................... $ 7,881,352         68,564      1.16      $10,087,830          54,194      0.72
   Savings and consumer time.............   3,587,824         46,830      1.75        3,937,051          33,583      1.14
   Large time............................   3,125,003         52,001      2.22        2,416,606          28,995      1.60
 Foreign deposits(3).....................   1,576,176         17,096      1.45        1,269,010           8,008      0.84
                                          -----------     ----------                -----------      ----------
        Total interest bearing deposits..  16,170,355        184,491      1.53       17,710,497         124,780      0.94
                                          -----------     ----------                -----------      ----------
 Federal funds purchased and securities
   sold under repurchase agreements......     463,067          5,134      1.48          414,446           2,763      0.89
 Commercial paper........................     999,030         12,998      1.74          899,456           7,397      1.10
 Other borrowed funds....................     543,796          8,740      2.15          191,480           3,983      2.78
 Medium and long-term debt...............     399,788          7,198      2.41          399,745           5,422      1.81
 UnionBanCal Corporation--obligated
   mandatorily redeemable preferred
   securities of subsidiary grantor trust     352,183         11,832      4.47          351,594          10,930      4.15
                                          -----------     ----------                -----------      ----------
        Total borrowed funds.............   2,757,864         45,902      2.22        2,256,721          30,495      1.80
                                          -----------     ----------                -----------      ----------
        Total interest bearing liabilities 18,928,219        230,393      1.63       19,967,218         155,275      1.04
                                                          ----------                                 ----------
 Noninterest bearing deposits............  11,915,106                                15,159,687
 Other liabilities.......................     968,204                                 1,022,854
                                          -----------                               -----------
        Total liabilities................  31,811,529                                36,149,759
 SHAREHOLDERS' EQUITY
 Common equity...........................   3,730,273                                 3,875,990
                                          -----------                               -----------
        Total shareholders' equity.......   3,730,273                                 3,875,990
                                          -----------                               -----------
        Total liabilities and
        shareholders' equity..........    $35,541,802                               $40,025,749
                                          ===========                               ===========
 Net interest income/margin
   (taxable-equivalent basis)............                  1,159,907      4.77%                       1,179,562      4.35%
 Less: taxable-equivalent adjustment.....                      1,604                                      1,916
                                                          ----------                                 ----------
        Net interest income..............                 $1,158,303                                 $1,177,646
                                                          ==========                                 ==========

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

(1)  Yields and  interest  income are  presented on a  taxable-equivalent  basis
     using the federal statutory tax rate of 35 percent.

(2)  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.

(3)  Foreign  loans and  deposits  are those loans and  deposits  originated  in
     foreign branches.
</FN>
</TABLE>


                                       33
<PAGE>


     Our net  interest  income is  impacted by changes in  interest  rates,  the
steepening  and  flattening of the yield curve and changes in volumes and mix of
earning assets, deposits, and interest bearing liabilities.  In addition, we use
interest rate  derivatives as an  asset-liability  management tool to manage the
effect of changes in interest rates on net interest income.  These interest rate
derivatives have offset a portion of the interest rate  compression  experienced
over the past year. If interest  rates remain at their current  levels,  our net
interest income will be positively  impacted by our in-the-money hedge positions
but to a lesser extent, as our existing cash flow hedges mature.

     THREE MONTHS ENDED SEPTEMBER 30, 2002 AND SEPTEMBER 30, 2003

     Net interest income, on a  taxable-equivalent  basis, was $401.7 million in
the third quarter of 2003,  compared with $392.6 million in the third quarter of
2002. This increase of $9.1 million, or 2 percent, was attributable primarily to
the impact of the  decreasing  interest  rate  environment  on interest  bearing
liabilities, increasing average noninterest bearing deposits, and higher earning
assets,  mostly  offset by  significantly  lower  yields on our earning  assets.
Decreasing  market rates resulted in lower average rates on our interest bearing
liabilities of 63 basis points on average  balances of $20.8 billion,  which was
mostly  offset by lower  average  yields of 92 basis  points on average  earning
assets of $37.9 billion,  which was favorably  impacted by higher  interest rate
derivatives income of $10.8 million. Mitigating the impact of the lower interest
rate  environment on our net interest  margin was an increase in average earning
assets of $5.1 billion,  primarily in securities and residential mortgage loans,
funded by a $3.8 billion, or 31 percent, increase in average noninterest bearing
deposits. As a result of these changes and a flattening yield curve environment,
as long-term  interest rates declined,  our net interest margin  decreased by 55
basis points, to 4.22 percent.

     Average  earning  assets were $37.9  billion in the third  quarter of 2003,
compared  with $32.8  billion  in the third  quarter  of 2002.  This  growth was
attributable to a $4.0 billion, or 68 percent, increase in average securities, a
$652.5  million,  or 199 percent,  increase in federal funds sold and securities
purchased under resale agreements and a $360.5 million,  or 1 percent,  increase
in average  loans.  The  increase in average  securities,  which were  comprised
primarily of fixed rate securities,  reflected  liquidity and interest rate risk
management  actions.  The  increase  in  average  loans was mostly due to a $1.4
billion  increase in average  residential  mortgages,  as we have  continued  to
strategically  shift  from  non-relationship  commercial  lending,  and a $399.8
million  increase  in  average  commercial  mortgages,  partly  offset by a $1.3
billion decrease in average  commercial,  financial,  and industrial  loans. The
increase in federal funds sold and securities  purchased under resale agreements
was  mainly  attributed  to a  significant  acceleration  in the rate of deposit
growth relative to loan growth.

     Deposit  growth,  especially  in  our  title  and  escrow  industries,  has
contributed  significantly  to our lower cost of funds  year-over-year.  Average
noninterest  bearing  deposits were $3.8 billion,  or 31 percent,  higher in the
third  quarter  of 2003 over the  prior  year,  which  included  a $1.2  billion
increase in average title and escrow  deposits.  We  anticipate  that the growth
rates in average  noninterest bearing deposits will decline from the 2003 growth
rates as refinancings slow down due to interest rate increases.

     NINE MONTHS ENDED SEPTEMBER 30, 2002 AND SEPTEMBER 30, 2003

     Net interest income,  on a  taxable-equivalent  basis, was $1.18 billion in
the first nine  months of 2003,  compared  with $1.16  billion in the first nine
months of 2002. This increase of $19.7 million,  or 2 percent,  was attributable
primarily to the impact of the decreasing  interest rate environment  throughout
the prior year on interest bearing  liabilities,  increasing average noninterest
bearing deposits,  and higher earning assets,  more than offset by significantly
lower yields on our earning  assets.  Decreasing  market rates resulted in lower
rates on our interest bearing liabilities of 59 basis points on average balances
of $20.0  billion,  which was partly offset by a lower average yield of 80 basis
points on average earning assets of $36.3 billion,  which was favorably impacted
by higher  interest rate  derivatives  income of $27.1  million.  Mitigating the
impact of the lower interest rate  environment on our net interest margin was an
increase in



                                       34
<PAGE>



average earning assets of $3.8 billion,  primarily in securities and residential
mortgage  loans,  funded by a $3.2 billion,  or 27 percent,  increase in average
noninterest  bearing  deposits.  As a result of these  changes and a  flattening
yield curve environment,  as long-term interest rates declined, our net interest
margin decreased by 42 basis points, to 4.35 percent.

     Average earning assets were $36.3 billion in the first nine months of 2003,
compared  with $32.5  billion in 2002.  This growth was  attributable  to a $2.5
billion, or 45 percent,  increase in average securities and a $960.2 million, or
4 percent, increase in average loans. The increase in average securities,  which
were  comprised  primarily of fixed rate  securities,  reflected  liquidity  and
interest rate risk management actions.  The increase in average loans was mostly
due to a $1.4 billion  increase in average  residential  mortgages,  which was a
result of a strategic  portfolio shift from more volatile commercial loans and a
$456.7 million increase in average commercial  mortgages,  partially offset by a
$774.7 million decrease in average commercial, financial, and industrial loans.

     Deposit  growth,  especially  in  our  title  and  escrow  industries,  has
contributed  significantly  to our lower cost of funds  year-over-year.  Average
noninterest  bearing  deposits were $3.2 billion,  or 27 percent,  higher in the
first nine months of 2003 over the first nine months of 2002,  which  included a
$1.1 billion increase in average title and escrow deposits.

NONINTEREST INCOME

<TABLE>
<CAPTION>

                                               FOR THE THREE MONTHS ENDED                       FOR THE NINE MONTHS ENDED
                                     -----------------------------------------------  ---------------------------------------------
                                                                         INCREASE                                      INCREASE
                                     SEPTEMBER 30,   SEPTEMBER 30,      (DECREASE)    SEPTEMBER 30,  SEPTEMBER 30,    (DECREASE)
(DOLLARS IN THOUSANDS)                    2002            2003        AMOUNT PERCENT      2002           2003       AMOUNT  PERCENT
------------------------------------ -------------   -------------   ------- -------  -------------  -------------  ------  -------
<S>                                  <C>             <C>             <C>      <C>     <C>            <C>           <C>       <C>
Service charges on deposit accounts. $      68,629   $      81,832   $13,203   19.24% $     204,641  $     232,061 $27,420   13.40%
Trust and investment management fees        35,368          35,429        61    0.17        109,680        101,245  (8,435)  (7.69)
International commissions and fees..        20,131          22,223     2,092   10.39         57,593         63,112   5,519    9.58
Insurance commissions...............         6,259          15,814     9,555  152.66         19,969         45,056  25,087  125.63
Card processing fees, net...........         9,068          10,335     1,267   13.97         26,343         29,357   3,014   11.44
Brokerage commissions and fees......         9,034           7,549    (1,485) (16.44)        27,614         24,614  (3,000) (10.86)
Merchant banking fees...............         6,819           9,312     2,493   36.56         22,845         21,521  (1,324)  (5.80)
Foreign exchange trading gains, net.         8,193           7,574      (619)  (7.56)        21,653         21,466    (187)  (0.86)
Securities gains (losses), net......         1,017          (2,618)   (3,635)     nm          2,986          7,042   4,056  135.83
Other...............................         4,598          14,020     9,422  204.92         11,141         44,938  33,797  303.36
                                     -------------   -------------   -------          -------------  -------------  ------
   Total noninterest income......... $     169,116   $     201,470   $32,354  19.13%  $     504,465  $     590,412 $85,947   17.04%
                                     =============   =============   =======          =============  =============  ======

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

nm = not meaningful.
</FN>
</TABLE>


     THREE MONTHS ENDED SEPTEMBER 30, 2002 AND SEPTEMBER 30, 2003

     In the third quarter of 2003,  noninterest  income was $201.5  million,  an
increase of $32.4 million,  or 19 percent,  over the third quarter of 2002. This
increase was mainly  attributable to a $13.2 million increase in service charges
on deposit accounts, a $9.6 million increase in insurance commissions, and lower
net losses of $5.6 million for commercial loans held for sale.

     Revenue from service  charges on deposit  accounts  was $81.8  million,  an
increase of $13.2  million or 19 percent  over the third  quarter of 2002.  This
increase  was  primarily  attributable  to a 25 percent  increase  in  quarterly
average demand deposits (excluding title and escrow deposits) and overdraft fees
of $3.5 million  associated  with a new  overdraft  program  introduced in April
2003.

     Trust and investment  management fees were $35.4 million,  up slightly from
the third quarter of 2002. Total assets under administration were $147.1 billion
as of September  30, 2003,  an increase of $17.4  billion,  or 13 percent,  from
September  30, 2002.  The  increase in asset  levels has been in lower  earning,
non-managed  assets,  while higher earning  managed  assets have  declined.  The
change in the mix of assets



                                       35
<PAGE>



has led to the  relatively  flat revenue  levels.  In addition,  the current low
interest rate environment has led to a significant  reduction in balances in the
HighMark money market funds.

     Insurance  commissions were $15.8 million,  an increase of $9.6 million, or
153  percent,   over  the  third  quarter  of  2002,  primarily  reflecting  the
incremental revenues associated with our insurance agency acquisitions.

     Other noninterest income was $14.0 million, an increase of $9.4 million, or
205 percent from the third quarter of 2002. This increase included:

     o    lower net losses of $5.6 million for  commercial  loans held for sale,
          and

     o    lower writedowns on private capital investments of $3.7 million in the
          third  quarter of 2003  compared  to the third  quarter of 2002 as the
          economy  appears to be  improving.  Our  private  capital  investments
          include  direct  investments  in  private  and  public  companies  and
          indirect  investments  in private  equity  funds.  The fair  values of
          publicly  traded  investments  are  determined  by using quoted market
          prices.  Investments that are not publicly traded are initially valued
          at cost and subsequent  adjustments to fair value are estimated  based
          on  a  company's   business   model,   current   projected   financial
          performance, liquidity and overall economic and market conditions.

     NINE MONTHS ENDED SEPTEMBER 30, 2002 AND SEPTEMBER 30, 2003

     In the first nine months of 2003, noninterest income was $590.4 million, an
increase of $85.9  million,  or 17 percent,  over the first nine months of 2002.
This increase was mainly  attributable  to a $27.4  million  increase in service
charges on deposit accounts, a $25.1 million increase in insurance  commissions,
lower writedowns on private capital investments of $13.6 million, lower residual
value  writedowns  on auto  leases of $9.0  million,  lower  net  losses of $8.0
million  for  commercial  loans  held  for  sale,  a $5.5  million  increase  in
international commissions and fees and a $4.1 million increase in net securities
gains mainly  attributable to a $9.0 million gain arising from the early call of
a Mexican  Brady Bond,  partly  offset by an $8.4 million  decrease in trust and
investment management fees.

     Revenue from service  charges on deposit  accounts was $232.1  million,  an
increase of $27.4  million,  or 13 percent,  over the first nine months of 2002.
This increase was  primarily  attributable  to a 22 percent  increase in average
demand deposits (excluding title and escrow deposits) over the first nine months
of 2002 and  overdraft  fees of $7.0  million  associated  with a new  overdraft
program introduced in April 2003.

     Trust and investment  management  fees were $101.2  million,  a decrease of
$8.4 million, or 8 percent, from the first nine months of 2002. This decrease is
primarily attributable to the decline in equity market values and lower revenues
as our clients shift toward fixed income investments.  In addition,  the current
low interest rate environment has led to a significant  reduction in balances in
the HighMark money market funds.

     International  commissions and fees were $63.1 million, an increase of $5.5
million, or 10 percent, reflecting a stronger growth in international markets.

     Insurance  commissions were $45.1 million, an increase of $25.1 million, or
126 percent,  reflecting the incremental  revenues associated with our insurance
agency    acquisitions,    and    growth    in    insurance    commissions    at
Armstrong/Robitaille, Inc.

     Securities gains, net, were $7.0 million compared to securities gains, net,
of $3.0  million in the first nine  months of 2002.  In the first nine months of
2003,  we  realized a gain of $9.0  million on an early call of a Mexican  Brady
Bond.

     Other noninterest  income was $44.9 million,  an increase of $33.8 million,
or 303  percent,  from the first nine months of 2002.  This  increase was mainly
attributable  to  lower  writedowns  on  private  capital  investments  of $13.6
million, reflecting an improving economy, a decrease of $9.0 million in residual
value


                                       36
<PAGE>



writedowns on auto leases,  as our auto lease  portfolio  liquidates,  lower net
losses of $8.0  million for  commercial  loans held for sale and $3.7 million in
insurance  recoveries  from the  September  11, 2001 World Trade  Center  attack
recorded in the current year.

NONINTEREST EXPENSE

<TABLE>
<CAPTION>


                                             FOR THE THREE MONTHS ENDED                        FOR THE NINE MONTHS ENDED
                                     -----------------------------------------------  ---------------------------------------------
                                                                         INCREASE                                      INCREASE
                                     SEPTEMBER 30,   SEPTEMBER 30,      (DECREASE)    SEPTEMBER 30,  SEPTEMBER 30,    (DECREASE)
(DOLLARS IN THOUSANDS)                    2002            2003        AMOUNT PERCENT       2002           2003      AMOUNT  PERCENT
------------------------------------ -------------   -------------   ------- -------  -------------  -------------  ------  -------
<S>                                  <C>             <C>             <C>       <C>    <C>            <C>           <C>        <C>
Salaries and other compensation..... $     152,057   $     169,705   $17,648   11.61% $     448,690  $     484,333 $35,643    7.94%
Employee benefits...................        30,218          35,597     5,379   17.80         98,561        118,005  19,444   19.73
                                     -------------   -------------   -------          -------------  -------------  ------
   Salaries and employee benefits...       182,275         205,302    23,027   12.63        547,251        602,338  55,087   10.07
Net occupancy.......................        27,340          31,342     4,002   14.64         75,750         91,844  16,094   21.25
Equipment...........................        16,343          15,680      (663)  (4.06)        48,650         48,705      55    0.11
Communications......................        13,186          12,661      (525)  (3.98)        39,695         39,859     164    0.41
Professional services...............        10,350          12,676     2,326   22.47         30,789         38,256   7,467   24.25
Software............................        10,061          11,996     1,935   19.23         31,610         34,921   3,311   10.47
Advertising and public relations....         9,145           9,227        82    0.90         27,774         28,587     813    2.93
Data processing.....................         7,944           7,659      (285)  (3.59)        24,475         23,887    (588)  (2.40)
Intangible asset amortization.......         1,497           2,587     1,090   72.81          3,661          8,291   4,630  126.47
Foreclosed asset expense (income)...            18             (79)      (97)     nm            130            (28)   (158)     nm
Other...............................        39,665          39,810       145    0.37        116,317        125,805   9,488    8.16
                                     -------------   -------------   -------          -------------  -------------  ------
   Total noninterest expense........ $     317,824   $     348,861   $31,037    9.77% $     946,102  $   1,042,465 $96,363   10.19%
                                     =============   =============   =======          =============  =============  ======


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

nm = not meaningful.
</FN>
</TABLE>


     THREE MONTHS ENDED SEPTEMBER 30, 2002 AND SEPTEMBER 30, 2003

     In the third quarter of 2003,  noninterest  expense was $348.9 million,  an
increase of $31.0 million,  or 10 percent,  over the third quarter of 2002. This
increase was primarily due to a $23.0 million  increase in salaries and employee
benefits and a $4.0 million increase in net occupancy.

     Salaries and employee  benefits were $205.3  million,  an increase of $23.0
million,  or 13  percent,  over the third  quarter of 2002.  This  increase  was
primarily attributable to annual merit increases, higher staff levels associated
with our recent acquisitions,  higher performance-related incentive expense, and
increased  insurance and health benefits  expenses due to increasing  healthcare
costs.

     Net occupancy expense was $31.3 million, an increase of $4.0 million, or 15
percent over the third quarter of 2002. This increase was primarily attributable
to recent  acquisitions,  new branch openings,  other  facilities  restructuring
initiatives and higher property insurance.

     NINE MONTHS ENDED SEPTEMBER 30, 2002 AND SEPTEMBER 30, 2003

     In the first nine months of 2003, noninterest expense was $1.04 billion, an
increase of $96.4  million,  or 10 percent,  over the first nine months of 2002.
This  increase was  primarily  due to a $55.1  million  increase in salaries and
employee benefits and a $16.1 million increase in net occupancy,  including $4.2
million related to the write-off of certain leasehold improvements.

     Salaries and employee  benefits were $602.3  million,  an increase of $55.1
million,  or 10 percent,  over the first nine months of 2002.  This increase was
primarily  attributable  to annual merit  increases,  higher staff levels mostly
associated with our recent acquisitions,  higher  performance-related  incentive
expense,  increased  insurance  and health  benefits  expense due to  increasing
healthcare costs, and higher 401(k) plan expenses.

     Net occupancy expense was $91.8 million,  an increase of $16.1 million,  or
21 percent,  over the first nine months of 2002.  This  increase  was  primarily
attributable  to recent  acquisitions,  new branch  openings,



                                       37
<PAGE>


other facilities restructuring initiatives, higher property insurance and a $4.2
million write-off of certain leasehold improvements.

     Professional  services  expense  was $38.3  million,  an  increase  of $7.5
million,  or 24 percent  over the first nine months of 2002.  This  increase was
primarily  attributable  to  increased  legal  services,  consulting  and  other
professional service expenses.

     Intangible  asset  amortization  was  $8.3  million,  an  increase  of $4.6
million,  or 126 percent,  from the first nine months of 2002. This increase was
primarily  associated with our acquisitions in the fourth quarter of 2002 and in
2003.

     Other noninterest  expense was $125.8 million, an increase of $9.5 million,
or 8 percent,  over the first nine months of 2002.  This  increase was primarily
attributable  to a $6.4 million  increase in  low-income  housing  credit (LIHC)
amortization  expense mostly  related to a higher number of LIHC  investments in
the current year and higher  operating  losses of $3.9 million mostly related to
an increase in the  provision for  contingency  losses  associated  with various
lawsuits.

INCOME TAX EXPENSE

     Income  tax  expense  in the  third  quarter  of 2003  was  $78.7  million,
resulting in a 34 percent  effective  income tax rate.  For the third quarter of
2002,  the  effective  income  tax rate was 32  percent,  which  included a $3.3
million net reduction to income tax expense  resulting  from a change in tax law
in the State of California concerning the tax treatment of loan loss reserves.

     Income tax  expense in the first  nine  months of 2003 was $215.3  million,
resulting in a 33 percent  effective  income tax rate. For the first nine months
of 2002, the effective income tax rate was also 33 percent.

LOANS

     The following table shows loans outstanding by loan type.

<TABLE>
<CAPTION>
                                                                                           PERCENT CHANGE TO
                                                                                        SEPTEMBER 30, 2003 FROM:
                                                                                      ----------------------------
                                     SEPTEMBER 30,   DECEMBER 31,    SEPTEMBER 30,    SEPTEMBER 30,   DECEMBER 31,
(DOLLARS IN THOUSANDS)                   2002            2002            2003             2002            2002
------------------------------------ -------------   -------------   -------------    -------------  -------------
<S>                                    <C>           <C>             <C>                 <C>            <C>
Domestic:
   Commercial, financial and
      industrial....................   $10,759,876   $  10,338,508   $   9,277,969       (13.77)%       (10.26)%
   Construction.....................     1,259,435       1,285,204       1,127,915       (10.44)        (12.24)
   Mortgage:
      Residential...................     5,852,932       6,382,227       7,106,098        21.41          11.34
      Commercial....................     3,950,568       4,150,178       4,310,957         9.12           3.87
                                     -------------   -------------   -------------
        Total mortgage..............     9,803,500      10,532,405      11,417,055        16.46           8.40
    Consumer:
      Installment...................       899,263         909,787         867,133        (3.57)         (4.69)
      Revolving lines of credit.....     1,057,245       1,102,771       1,168,374        10.51           5.95
                                     -------------   -------------   -------------
        Total consumer..............     1,956,508       2,012,558       2,035,507         4.04           1.14
   Lease financing..................       836,688         812,918         668,074       (20.15)        (17.82)
                                     -------------   -------------   -------------
        Total loans in domestic
          offices...................    24,616,007      24,981,593      24,526,520        (0.36)         (1.82)
Loans originated in foreign branches     1,346,152       1,456,490       1,520,856        12.98           4.42
                                     -------------   -------------   -------------
        Total loans................. $  25,962,159   $  26,438,083   $  26,047,376         0.33%         (1.48)%
                                     =============   =============   =============
</TABLE>




                                       38
<PAGE>



     Our  lending  activities  are  predominantly   domestic,  with  such  loans
comprising 94 percent of the total loan  portfolio at September 30, 2003.  Total
loans at September 30, 2003, were $26.0 billion,  an increase of $85 million, or
0.3 percent, from September 30, 2002. The increase was mainly attributable to an
increase in the residential  mortgage portfolio of $1.3 billion,  an increase in
the commercial mortgage portfolio of $360 million,  and an increase in the loans
originated in foreign  branches of $175  million,  partly offset by a decline in
the  commercial,  financial and industrial  loan portfolio of $1.5 billion and a
decline in lease financing of $169 million.

     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.  This  portfolio  has a high
degree of geographic  diversification  based upon our customers'  revenue bases,
which we believe lowers our  vulnerability to changes in the economic outlook of
any particular  region of the US. The commercial,  financial and industrial loan
portfolio was $9.3 billion, or 36 percent of total loans, at September 30, 2003,
compared  with $10.8  billion,  or 41 percent of total loans,  at September  30,
2002.  The  decrease of $1.5  billion,  or 14  percent,  from the prior year was
primarily  attributable  to current  economic  conditions that have reduced loan
demand in some  segments.  Loan sales and managed exits also  contributed to the
decline and are  consistent  with our  strategy  to reduce our  exposure to more
volatile  commercial  loans and increase the percentage of more stable  consumer
loans (including residential mortgages).

     The construction loan portfolio totaled $1.1 billion, or 4 percent of total
loans, at September 30, 2003,  compared with $1.3 billion, or 5 percent of total
loans, at September 30, 2002. This decrease of $132 million, or 10 percent, from
the prior year was primarily  attributable to the slowing economy and its impact
on development and construction projects.

     Commercial  mortgages were $4.3 billion,  or 17 percent of total loans,  at
September 30, 2003,  compared with $4.0 billion, or 15 percent, at September 30,
2002. The mortgage loan portfolio consists of loans on commercial and industrial
projects primarily in California.  The increase in commercial  mortgages of $360
million,  or 9 percent,  from  September  30,  2002,  was  primarily  due to our
acquisition of Monterey Bay Bank in the third quarter of 2003.

     Residential  mortgages were $7.1 billion,  or 27 percent of total loans, at
September 30, 2003, compared with $5.9 billion, or 23 percent of total loans, at
September 30, 2002. The increase in residential mortgages of $1.3 billion, or 21
percent,  from September 30, 2002,  continues to be influenced by high refinance
market due to low rates.  While we hold most of the loans we originate,  we sell
most of our 30-year, fixed rate non-Community Reinvestment Act (CRA) residential
mortgage loans.

     Consumer  loans  totaled  $2.0  billion,  or  8  percent  of  total  loans,
substantially  unchanged from September 30, 2002. A slight  increase in consumer
loans of $79.0 million, or 4 percent, was primarily  attributable to an increase
in home equity loans, partially offset by pay-offs related to the run-off of the
automobile  dealer  lending  business  exited in the third quarter of 2000.  The
indirect  automobile  dealer  lending  portfolio at September 30, 2003 was $68.3
million.

     Lease  financing  totaled $668.1  million,  or 3 percent of total loans, at
September 30, 2003,  compared with $836.7 million,  or 3 percent of total loans,
at September 30, 2002. As we announced in 2001, we have ceased  originating auto
leases.  At September 30, 2003, our portfolio had declined to $119.6 million and
will decline 40 percent by December  2003, 90 percent by December 2004, and will
fully mature by mid-year 2006.

     Loans originated in foreign branches totaled $1.5 billion,  or 6 percent of
total loans, at September 30, 2003, compared with $1.3 billion, or 5 percent, at
September  30, 2002.  The increase in loans  originated  in foreign  branches of
$174.7  million,  or  13  percent,   from  September  30,  2002,  was  primarily
attributable  to higher trade finance  borrowings  from  financial  institutions
attracted to lower US interest  rates and  increased  lending in Canada where we
established a branch in 2002.


                                       39
<PAGE>


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 September  30, 2002,  December 31, 2002 and  September  30, 2003,  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.  The amounts outstanding exclude local currency  outstandings.
For any  country  shown in the table  below,  we do not have  significant  local
currency  outstandings  that are not hedged or are not 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>
September 30, 2002
Korea.........................      $580              $--                 $55              $635
December 31, 2002
Korea.........................      $599              $--                 $75              $674
September 30, 2003
Korea.........................      $636              $--                 $42              $678

</TABLE>













                                       40
<PAGE>



PROVISION FOR CREDIT LOSSES

     We recorded a $20 million  provision for credit losses in the third quarter
of 2003,  compared  with a $40 million  provision for credit losses for the same
period in the prior  year.  The  provision  for credit  losses in the first nine
months of 2003 was $75  million,  compared  with a $145  million  provision  for
credit  losses  for the same  period in the prior  year.  Provisions  for credit
losses are charged to income to bring our allowance for credit losses to a level
deemed appropriate by management based on the factors discussed under "Allowance
for Credit Losses" below.

ALLOWANCE FOR CREDIT LOSSES

     We maintain an allowance for credit losses to absorb losses inherent in the
loan portfolio. The allowance is based on our regular,  quarterly assessments of
the probable  estimated  losses inherent in the loan portfolio,  and to a lesser
extent,  unused commitments to provide financing.  Our methodology for measuring
the  appropriate  level of the allowance  relies on several key elements,  which
include the formula allowance,  specific allowances for identified problem loans
and portfolio segments, and the unallocated allowance.

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

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

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

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

     We believe  that an  economic  cycle is a period in which both  upturns and
downturns in the economy have been  reflected.  We calculate loss factors over a
time interval  that we believe is  reflective  of a complete and  representative
economic cycle.

     Specific   allowances  are  established  in  cases  where   management  has
identified  significant  conditions  or  circumstances  related to a credit or a
portfolio segment that management  believes indicate the probability that a loss
has been incurred.  This amount may be determined  either by a method prescribed
by 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"  or  methods  that  include  a range of  probable
outcomes based upon certain qualitative factors.

     The unallocated allowance is based on management's evaluation of conditions
that are not directly reflected in the determination of the formula and specific
allowances. The evaluation of the inherent loss with respect to these conditions
is subject to a higher degree of uncertainty  because they may not be identified
with specific problem credits or portfolio segments. The conditions evaluated in
connection with the unallocated  allowance include the following,  which existed
at the balance sheet date:

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

     o    credit  quality  trends  (including  trends  in  nonperforming   loans
          expected to result from existing conditions);


                                       41
<PAGE>



     o    collateral values;

     o    loan volumes and concentrations;

     o    seasoning of the loan portfolio;

     o    specific industry conditions within portfolio segments;

     o    recent loss experience in particular segments of the portfolio;

     o    duration of the current economic cycle;

     o    bank regulatory examination results; and

     o    findings of our internal credit examiners.

     Executive  management reviews these conditions quarterly in discussion with
our senior  credit  officers.  To the  extent  that any of these  conditions  is
evidenced by a specifically  identifiable problem credit or portfolio segment as
of the evaluation date,  management's  estimate of the effect of such conditions
may be reflected as a specific allowance, applicable to such credit or portfolio
segment.  Where  any of these  conditions  is not  evidenced  by a  specifically
identifiable  problem  credit or portfolio  segment as of the  evaluation  date,
management's  evaluation  of the  probable  loss  related to such  condition  is
reflected in the unallocated allowance.

     The allowance for credit losses is based upon estimates of probable  losses
inherent in the loan  portfolio.  The actual  losses can vary from the estimated
amounts.  Our methodology  includes several features that are intended to reduce
the differences  between  estimated and actual losses.  The loss migration model
that is used to  establish  the loan loss  factors for problem  graded loans and
pass  graded  commercial,  financial,  and  industrial  loans is  designed to be
self-correcting  by taking into  account  our loss  experience  over  prescribed
periods.  Similarly,  by basing the pass graded loan loss  factors over a period
reflective  of an  economic  cycle,  the  methodology  is  designed to take into
account our recent loss  experience  for  commercial  real estate  mortgages and
construction  loans.  Pooled loan loss factors are adjusted quarterly  primarily
based  upon the level of net  charge-offs  expected  by  management  in the next
twelve months.  Furthermore,  based on management's  judgement,  our methodology
permits  adjustments  to any loss factor used in the  computation of the formula
allowance  for  significant  factors,  which  affect the  collectibility  of the
portfolio as of the evaluation  date, but are not reflected in the loss factors.
By assessing the probable  estimated  losses inherent in the loan portfolio on a
quarterly  basis,  we are able to adjust  specific and inherent  loss  estimates
based upon the most recent information that has become available.

     COMPARISON OF THE TOTAL  ALLOWANCE AND RELATED  PROVISION FOR CREDIT LOSSES
     FROM DECEMBER 31, 2002

     At  December  31,  2002,  our total  allowance  for credit  losses was $609
million,  or 2.30 percent of the total loan portfolio and 180.9 percent of total
nonaccrual  loans.  At September 30, 2003, our total allowance for credit losses
was $551 million,  or 2.11 percent of the total loan portfolio and 161.4 percent
of total nonaccrual loans. In addition,  the allowance  incorporates the results
of measuring  impaired  loans as provided in SFAS No. 114 as amended by SFAS No.
118.  These  accounting  standards  prescribe the  measurement  methods,  income
recognition  and  disclosures  related to impaired  loans. At December 31, 2002,
total impaired loans were $300 million, and the associated  impairment allowance
was $106 million, compared with $289 million and $93 million,  respectively,  at
September  30,  2003.  On September  30, 2003 and  December 31, 2002,  the total
allowance for credit losses for off-balance  sheet commitments was $78.5 million
and $75.4 million, respectively.

     During  the third  quarter of 2003,  there  were no  changes in  estimation
methods  or  assumptions   that  affected  our  methodology  for  assessing  the
appropriateness of the formula and specific allowances for credit losses, except
for an adjustment in the years in the  historical  period used to calculate loss
factors, which resulted in a $14 million increase to the allocated allowance. We
believe  that  this  adjustment  more


                                       42
<PAGE>



closely  reflects the current  economic  environment.  Changes in estimates  and
assumptions  regarding  the  effects of  economic  and  business  conditions  on
borrowers and other factors,  which are described below, affected the assessment
of the unallocated allowance.

     We recorded a $20 million  provision  in the third  quarter of 2003,  which
took into  consideration the following  factors:  fragility of the U.S. economy;
weakness  in  capital  spending  and  employment  growth;  and  trends in credit
quality.

     CHANGES IN THE FORMULA AND SPECIFIC ALLOWANCES

     At September 30, 2003, the formula allowance was $272 million,  compared to
$294 million at December 31, 2002, a decrease of $22 million. The decline in the
formula  allowance is primarily  related to lower levels of criticized  credits.
The specific allowance was $104 million at September 30, 2003,  compared to $121
million at December 31,  2002,  a decrease of $17  million.  The decrease in the
specific  allowance  is due to slightly  lower  average  loss content on reduced
levels of impaired loans.

     CHANGES IN THE UNALLOCATED ALLOWANCE

     At September 30, 2003, the unallocated allowance was $175 million, compared
to $194 million at December 31, 2002, a decrease of $19 million.  In  evaluating
the  appropriateness of the unallocated  allowance,  we considered the following
factors,  as well as more general factors such as the interest rate  environment
and the  impact of the  economic  downturn  on those  borrowers  who have a more
leveraged financial profile:

     o    With  respect  to  the  commercial  real  estate  sector,   management
          considered the continuing weak demand growth and excess supply in many
          markets with the national  office vacancy rate  continuing to rise and
          average rents  falling,  as well as the specific  weakness in Northern
          California  resulting from regional  over-dependence on the technology
          sector and some  portfolio  concentration  in the office and apartment
          markets, which could be in the range of $16 million to $32 million.

     o    With  respect  to  the   communications/media   industry,   management
          considered the impact of low consumer  confidence on consumer spending
          and weak, although  improving,  advertising  revenues,  as well as the
          increasingly    competitive   environment   facing   telecommunication
          carriers, which could be in the range of $11 million to $31 million.

     o    With respect to power companies and utilities,  management  considered
          the continuing excess capacity and weak prices in the power generation
          market,  compounded  by the costs  and  disruptions  of moving  out of
          merchant generation and energy trading  operations,  which could be in
          the range of $14 million to $28 million.

     o    With  respect  to  cross-border   loans  and  acceptances  to  certain
          Asia/Pacific  Rim  countries,  management  considered  the  effects of
          slower US growth up to very recently,  Japan's continuing  struggle to
          break out of  recession  and the need for  further  structural  reform
          across most of the East Asian  region,  which could be in the range of
          $8 million to $17 million.

     o    With respect to the retail sector,  management  considered the adverse
          effects of still weak labor  markets,  high  consumer  debt levels and
          near-record personal  bankruptcies,  which could be in the range of $6
          million to $12 million.

     o    With respect to the State of  California,  management  considered  the
          adverse effects of the recent  Gubernatorial  recall, which aggravated
          an  already  volatile  political   environment  and  uncertain  fiscal
          situation,  and the severity of challenges  that the new Governor will
          face, which could be in the range of $6 million to $12 million.


                                       43
<PAGE>


     o    With respect to leasing, management considered the ongoing problems of
          the airline  industry  as it  continues  to  struggle  with the weaker
          economy,  the sluggish recovery of international  travel and high fuel
          prices, which could be in the range of $5 million to $11 million.

     o    With respect to the technology industry,  management  considered weak,
          although improving, capital spending in the US, as well as the effects
          of steepening price declines  resulting in less robust revenue growth,
          which could be in the range of $4 million to $9 million.

     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 above.

     Although in certain  instances the  downgrading  of a loan  resulting  from
these effects was reflected in the formula allowance,  management  believes that
in most  instances  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 of such loans. Accordingly,
our evaluation of the probable  losses related to these factors was reflected in
the unallocated  allowance.  The evaluations of the inherent losses with respect
to these factors were subject to higher degrees of uncertainty because they were
not identified with specific problem credits.

     CHANGE IN THE TOTAL ALLOWANCE FOR CREDIT LOSSES

     The following table sets forth a reconciliation of changes in our allowance
for credit losses.

<TABLE>
<CAPTION>

                                                            FOR THE THREE MONTHS             FOR THE NINE MONTHS
                                                             ENDED SEPTEMBER 30,             ENDED  SEPTEMBER 30,
                                                          ------------------------        ------------------------
(DOLLARS IN THOUSANDS)                                      2002            2003            2002            2003
-----------------------------------------------------     --------        --------        --------        --------
<S>                                                       <C>             <C>             <C>             <C>
Balance, beginning of period.........................     $624,948        $558,282        $634,509        $609,190
Loans charged off:
   Commercial, financial and industrial..............       48,284          41,457         178,462         130,413
   Commercial mortgage...............................        1,572           7,286           1,592           7,286
   Consumer..........................................        2,370           2,058           7,605           7,143
   Lease financing...................................          479             518           1,986          32,726
   Foreign(1)........................................           --           2,220              --           2,220
                                                          --------        --------        --------        --------
       Total loans charged off.......................       52,705          53,539         189,645         179,788
Recoveries of loans previously charged off:
   Commercial, financial and industrial..............        8,769          13,845          26,108          32,432
   Construction......................................           --              --              40              --
   Commercial mortgage...............................           75              --             214             150
   Consumer..........................................        2,012           1,276           3,793           2,695
   Lease financing...................................          115             183             497             352
                                                          --------        --------        --------        --------
       Total recoveries of loans previously
       charged off...................................       10,971          15,304          30,652          35,629
                                                          --------        --------        --------        --------
          Net loans charged off......................       41,734          38,235         158,993         144,159
Provision for credit losses..........................       40,000          20,000         145,000          75,000
Foreign translation adjustment and other
  net additions(2)...................................         (136)         10,503           2,562          10,519
                                                          --------        --------        --------        --------
Balance, end of period...............................     $623,078        $550,550        $623,078        $550,550
                                                          ========        ========        ========        ========
Allowance for credit losses to total loans...........         2.40%           2.11%           2.40%           2.11%
Provision for credit losses to net loans
  charged off........................................        95.85           52.31           91.20           52.03
Net loans charged off to average loans
  outstanding for the period(3)......................         0.64            0.58            0.83            0.73

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

(1)  Foreign loans are those loans originated in foreign branches.

(2)  Includes $10.3 million relates to the Monterey Bay Bank  acquisition in the
     third  quarter  of 2003  and  $2.4  million  for  the  First  Western  Bank
     acquisition in 2002.

(3)  Annualized.
</FN>
</TABLE>


                                       44
<PAGE>


     Total loans  charged  off in the third  quarter of 2003  increased  by $0.8
million from the third quarter of 2002.  Charge-offs  reflect the realization of
losses in the portfolio that were recognized  previously  through provisions for
credit losses.

     Third quarter 2003 recoveries of loans previously  charged off increased by
$4.3 million from the third quarter of 2002. The percentage of net loans charged
off to average loans  outstanding  for the third quarter of 2003  decreased by 6
basis points from the same period in 2002. At September 30, 2003,  the allowance
for credit losses exceeded the annualized net loans charged off during the third
quarter  of  2003,  reflecting  management's  belief,  based  on  the  foregoing
analysis, that there are additional losses inherent in the portfolio.

     Historical net charge-offs are not necessarily  indicative of the amount of
net charge-offs that we will realize in the future.

NONPERFORMING ASSETS

<TABLE>
<CAPTION>

                                               SEPTEMBER 30,       DECEMBER 31,      SEPTEMBER 30,
(DOLLARS IN THOUSANDS)                             2002                2002               2003
---------------------------------------------- -------------       ------------      -------------
<S>                                            <C>                 <C>               <C>
Commercial, financial and industrial.......... $     367,888       $    276,415      $     243,877
Construction..................................         1,096                 --              1,554
Commercial mortgage...........................        24,133             23,980             42,758
Lease financing...............................         2,095             36,294             52,085
Loan originated in foreign branches...........            --                 --                765
                                               -------------       ------------      -------------
   Total nonaccrual loans.....................       395,212            336,689            341,039
Foreclosed assets.............................           309                715              3,308
                                               -------------       ------------      -------------
   Total nonperforming assets................. $     395,521       $    337,404      $     344,347
                                               =============       ============      =============
Allowance for credit losses................... $     623,078       $    609,190      $     550,550
                                               =============       ============      =============
Nonaccrual loans to total loans...............          1.52%              1.27%              1.31%
Allowance for credit losses to nonaccrual
  loans.......................................        157.66             180.94             161.43
Nonperforming assets to total loans and
  foreclosed assets...........................          1.52               1.28               1.32
Nonperforming assets to total assets..........          1.05               0.84               0.81


</TABLE>


     At September 30, 2003,  nonperforming  assets  totaled $344.3  million,  an
increase of $6.9 million, or 2 percent,  from December 31, 2002. This relatively
small  increase was primarily  due to a significant  reduction in inflows of new
nonperforming  loans during 2003. The increase in nonaccrual loans was primarily
due to our decision to place additional airplane leases on nonaccrual, partially
offset by our decision during the second quarter of 2003, to return two airplane
leases,  totaling $18.3 million,  to accrual status. In addition,  we placed two
San Francisco Bay Area office loans,  totaling  approximately  $22.8 million, on
nonaccrual status in the second quarter of 2003.

     Nonaccrual  loans as a  percentage  of total  loans  were 1.31  percent  at
September  30,  2003,   compared  with  1.52  percent  at  September  30,  2002.
Nonperforming  assets as a percentage of total loans and foreclosed  assets were
1.32 percent at September  30, 2003,  compared to 1.52 percent at September  30,
2002.




                                       45
<PAGE>


LOANS 90 DAYS OR MORE PAST DUE AND STILL ACCRUING


<TABLE>
<CAPTION>


                                               SEPTEMBER 30,       DECEMBER 31,      SEPTEMBER 30,
(DOLLARS IN THOUSANDS)                             2002                2002               2003
---------------------------------------------- -------------       ------------      -------------
<S>                                            <C>                 <C>               <C>
Commercial, financial and industrial.......... $         565       $      1,705      $      21,598
Construction..................................            --                679                 --
Mortgage:
   Residential................................         4,127              3,211              1,777
   Commercial.................................            --                506                982
                                               -------------       ------------      -------------
      Total mortgage..........................         4,127              3,717              2,759
Consumer and other............................         2,121              2,072              1,706
                                               -------------       ------------      -------------
   Total loans 90 days or more past due
     and still accruing....................... $       6,813       $      8,173      $      26,063
                                               =============       ============      =============

</TABLE>


     The increase in commercial, financial, and industrial loans 90 days or more
past due, but still accruing is  attributable  to one loan of $17.8 million that
is current on its interest  payments but is past its  maturity  date.  We expect
that this facility will be refinanced in the fourth quarter of 2003 and will not
become a nonperforming asset.

     QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT INTEREST RATE RISK MANAGEMENT
     (OTHER THAN TRADING)

     THE FOLLOWING INFORMATION ON MARKET RISK ASSOCIATED WITH INTEREST RATE RISK
IS BEING PROVIDED IN ORDER TO EXPAND THE INFORMATION ON THE ASSUMPTIONS  USED IN
OUR SIMULATION  MODELS,  WHICH  QUANTIFY OUR  SENSITIVITY TO CHANGES IN INTEREST
RATES.  SEE ALSO  PART I,  ITEM 3 OF THIS  DOCUMENT,  TITLED  "QUANTITATIVE  AND
QUALITATIVE DISCLOSURE ABOUT MARKET RISK."

     Market risk is the risk of loss to future earnings,  to fair values,  or to
future  cash  flows  that may result  from  changes in the price of a  financial
instrument.  The  value of a  financial  instrument  may  change  as a result of
changes in interest rates,  foreign currency  exchange rates,  commodity prices,
equity  prices,  and other  market  changes  that affect  market risk  sensitive
instruments.  Market risk is attributable to all market risk sensitive financial
instruments,  including securities,  loans, deposits, and borrowings, as well as
derivative  instruments.  Our exposure to market risk is a function of our asset
and liability management activities, our trading activities for our own account,
and our role as a financial intermediary in customer-related  transactions.  The
objective  of market  risk  management  is to avoid  excessive  exposure  of our
earnings  and equity to loss and to reduce the  volatility  inherent  in certain
financial instruments.

     The management of market risk is governed by policies reviewed and approved
annually by our Board of Directors (Board). The Board assigns responsibility for
the  administration of market risk management to the Chief Executive Officer who
designates the chairman of the Asset & Liability  Management Committee (ALCO), a
committee composed of UnionBanCal Corporation executives. ALCO meets monthly and
reports  quarterly  to  the  Finance  and  Capital  Committee  of the  Board  on
activities  related to the  management of market risk. As part of the management
of our market risk, ALCO may direct changes in the mix of assets and liabilities
and the  extent  to  which  we  utilize  investment  securities  and  derivative
instruments  such as interest rate swaps,  caps and floors to hedge our interest
rate  exposures.  ALCO  reviews and  approves  specific  market risk  management
programs  involving  investment  and hedging  activities and certain market risk
limits.  The ALCO Chairman is  responsible  for the  company-wide  management of
market risk. The Treasurer is responsible for implementing  funding,  investing,
and hedging strategies  designed to manage this risk. On a day-to-day basis, the
monitoring of market risk takes place at a  centralized  level within the Market
Risk  Monitoring  unit (MRM).  MRM is responsible  for measuring risks to ensure
compliance  with all market risk limits and guidelines  incorporated  within the
policies and procedures  established by the Board and ALCO. MRM reports  monthly
to ALCO on trading risk  exposures  and on  compliance  with interest rate risk,
securities  portfolio and derivatives  policy limits. MRM



                                       46
<PAGE>



also reports quarterly to ALCO on the  effectiveness of our hedging  activities.
In addition,  periodic  reviews by our internal audit  department and regulators
provide further evaluation of controls over the risk management process.

     We have  separate  and  distinct  methods  for  managing  the  market  risk
associated  with our trading  activities and our asset and liability  management
activities, as described below.

     INTEREST RATE RISK MANAGEMENT (OTHER THAN TRADING)

     We engage in asset and  liability  management  activities  with the primary
purposes of managing the  sensitivity of net interest income (NII) to changes in
interest  rates within limits  established  by the Board and  maintaining a risk
profile that is consistent with management's strategic objectives.

     The  Asset &  Liability  Management  (ALM)  Policy  approved  by the  Board
requires  monthly  monitoring of interest rate risk by ALCO through a variety of
modeling  techniques that are used to quantify the sensitivity of NII to changes
in interest rates. As directed by ALCO, and in  consideration  of the importance
of our demand  deposit  accounts  as a funding  source,  NII is  adjusted in the
official  policy risk measure to incorporate  the effect of certain  noninterest
expense  items  related to these  deposits  that are  nevertheless  sensitive to
changes in interest  rates.  In managing  interest rate risk,  ALCO monitors NII
sensitivity on both an adjusted and unadjusted basis.

     Our  unhedged  NII remains  inherently  asset  sensitive,  meaning that our
assets  generally  reprice more quickly than our  liabilities,  particularly our
core deposits.  Since the NII associated with an asset  sensitive  balance sheet
tends to decrease when interest  rates decline and increase when interest  rates
rise,  derivative  hedges and the  securities  portfolio are used to manage this
risk.  In the third quarter of 2003, we entered into $1 billion in interest rate
floors to offset the adverse impact that declining  interest rates could have on
the  interest  income  generated  by our  variable  rate  commercial  loans.  We
continued to increase the size of our securities portfolio in response to strong
growth  in core  deposits.  Our  recent  purchases  were  concentrated  in short
duration  securities to maintain  flexibility  to respond to changes in interest
rates.  For a further  discussion  of  derivative  instruments  and our  hedging
strategies,  see Note 16--"Derivative  Instruments" of the Notes to Consolidated
Financial Statements included in our Form 10-K/A for the year ended December 31,
2002.

     Together,  our hedging and investment activities resulted in an essentially
neutral risk profile for the hedged balance sheet with respect to parallel yield
curve shifts.  However,  our NII is also sensitive to non-parallel shifts in the
yield  curve.  In  general,  our NII  increases  when the yield  curve  steepens
(specifically when short rates, under one year, drop and long rates,  beyond one
year, rise),  while a flattening curve tends to depress our NII and net interest
margin.  In this  respect,  our NII is asset  sensitive  when  measured  against
changes in long rates and slightly  liability  sensitive  when measured  against
changes in short rates.  This asset  sensitivity  in relation to a flattening of
the  yield  curve  is  manifested  in  the  NII  simulations   primarily  by  an
acceleration  of mortgage  prepayments  (in both the  residential  portfolio and
securities  portfolio) when long rates decline. In the current rate environment,
run off of  fixed  rate  assets,  including  prepayments,  depress  NII  even if
interest  rates do not change because the cash flows from the repaid and prepaid
assets that were booked at higher rates must be reinvested  at lower  prevailing
rates. As a result, we expect the low prevailing rates,  coupled with the recent
high volume of  prepayments,  will further  compress our net interest margin and
negatively  affect  NII in the coming  months,  even if market  rates  remain at
current levels.

     Our official NII policy measure involves a simulation of "Earnings-at-Risk"
(EaR) in which we estimate the impact that gradual, ramped-on parallel shifts in
the yield  curve  would have on NII over a 12-month  horizon.  Under the Board's
policy limits, the negative change in simulated NII in either the up or down 200
basis point shock  scenarios  may not exceed 4 percent of NII as measured in the
base case, or



                                       47
<PAGE>



no change,  scenario.  The following table sets forth the simulation  results in
both the up and down 200 basis  point  ramp  scenarios  as of June 30,  2003 and
September 30, 2003(1):

<TABLE>
<CAPTION>


                                          JUNE 30,       SEPTEMBER 30,
(DOLLARS IN MILLIONS)                       2003             2003
---------------------------------------   --------       -------------
<S>                                       <C>              <C>
-200 basis points......................   $    6.7         $   17.3
as a percentage of base case NII.......       0.46%            1.13%
-200 basis points......................   $   (2.4)        $  (16.0)
as a percentage of base case NII.......       0.17%            1.21%


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

(1)  For these policy simulations,  NII is adjusted to incorporate the effect of
     certain  noninterest  expense  items  related to demand  deposits  that are
     nevertheless sensitive to changes in interest rates.

</FN>
</TABLE>



     EaR in the down 200 basis  point  scenario  was  ($16.0)  million,  or 1.21
percent of  adjusted  NII in the base case  scenario,  well  within the  Board's
guidelines.

     However,  with federal funds and LIBOR rates  already below two percent,  a
downward  ramp  scenario of 200 basis  points would  result in  short-term  rate
levels below zero. As a result,  we believe that a downward ramp scenario of 100
basis  points  provides  a more  reasonable  measure of asset  sensitivity  in a
falling  interest rate  environment.  As of September 30, 2003,  the  difference
between adjusted NII in the base case and adjusted NII after a gradual 100 basis
point  downward  ramp was a negative  $6.5  million,  or .45 percent of the base
case.

     Management's goal in the NII simulations is to capture the risk embedded in
the balance sheet. As a result,  asset and liability  balances are kept constant
throughout the analysis horizon. Two exceptions are non-maturity deposits, which
vary with levels of interest rates  according to  statistically  derived balance
equations,  and  discretionary  derivative  hedges and fixed income  portfolios,
which are allowed to run off.

     Additional  assumptions  are made to model the future  behavior  of deposit
rates and loan spreads based on statistical analysis,  management's outlook, and
historical  experience.  The prepayment  risks related to residential  loans and
mortgage-backed  securities are measured using industry  estimates of prepayment
speeds. The sensitivity of the simulation results to the underlying  assumptions
is  tested  as a  regular  part  of the  risk  measurement  process  by  running
simulations with different assumptions. In addition,  management supplements the
official  risk measures  based on the constant  balance  sheet  assumption  with
volume-based   simulations  of  NII  based  on  forecasted   balances  and  with
value-based    simulations   that   measure   the   sensitivity   of   economic-
value-of-equity  (EVE) to changes in interest rates. We believe that,  together,
these simulations provide management with a reasonably comprehensive view of the
sensitivity of our operating results to changes in interest rates, at least over
the measurement  horizon.  However,  as with any financial model, the underlying
assumptions  are  inherently  uncertain  and subject to  refinement  as modeling
techniques  and  theory  improve  and  historical   data  becomes  more  readily
accessible.  Consequently,  our simulation  models cannot predict with certainty
how rising or falling  interest rates might impact net interest  income.  Actual
and  simulated  NII  results  will  differ to the extent  there are  differences
between actual and assumed  interest rate changes,  balance sheet  volumes,  and
management strategies, among other factors.

     TRADING ACTIVITIES

     We  enter  into  trading  account  activities   primarily  as  a  financial
intermediary  for  customers,  and, to a minor extent,  for our own account.  By
acting as a financial  intermediary,  we are able to provide our customers  with
access to a wide range of products from the securities,  foreign  exchange,  and
derivatives  markets.  In acting for our own account,  we may take  positions in
some of these  instruments  with the  objective of generating  trading  profits.
These  activities  expose us to two primary types of market risk:  interest rate
and foreign currency exchange risk.



                                       48
<PAGE>



     In  order to  manage  interest  rate and  foreign  currency  exchange  risk
associated with our trading activities,  we utilize a variety of non-statistical
methods including:  position limits for each trading activity,  daily marking of
all positions to market, daily profit and loss statements, position reports, and
independent  verification of all inventory  pricing.  Additionally,  Market Risk
Monitoring (MRM) reports positions and profits and losses daily to the Treasurer
and trading  managers and weekly to the ALCO Chairman.  ALCO is provided reports
on a monthly  basis.  We believe  that these  procedures,  which  stress  timely
communication between MRM and senior management, are the most important elements
of the risk management process.

     We use a form of Value at Risk (VaR)  methodology  to measure  the  overall
market risk inherent in our trading account activities.  Under this methodology,
management statistically calculates, with 97.5 percent confidence, the potential
loss in fair value that we might experience if an adverse shift in market prices
were to occur within a period of 5 business  days.  The amount of VaR is managed
within  limits well below the maximum limit  established  by Board policy at 0.5
percent of  shareholders'  equity.  The VaR model  incorporates  a number of key
assumptions, including assumed holding period and historical volatility based on
3 years of historical  market data updated  quarterly.  The following table sets
forth the average, high and low year-to-date VaR for our trading activities.


<TABLE>
<CAPTION>

                                              DECEMBER 31, 2002               SEPTEMBER 30, 2003
                                          -------------------------       -------------------------
                                          AVERAGE      HIGH     LOW       AVERAGE      HIGH     LOW
(DOLLARS IN THOUSANDS)                      VAR         VAR     VAR         VAR         VAR     VAR
----------------------------------------- -------      ----     ---       -------      ----     ---
<S>                                       <C>          <C>      <C>       <C>          <C>      <C>
Foreign exchange......................... $   256      $546     $88       $   144      $340     $57
Securities...............................     213       543      45           213       463      97

</TABLE>


     Consistent  with our  business  strategy of focusing on the sale of capital
markets  products  to  customers,  we  manage  our  trading  risk  exposures  at
conservative  levels,  well below the trading risk policy limits  established by
the Board. As a result,  our foreign exchange  business  continues to derive the
bulk of its  revenue  from  customer-related  transactions.  We take  inter-bank
trading  positions  only on a  limited  basis  and we do not take  any  large or
long-term  strategic  positions in the market for the Bank's own  portfolio.  We
continue  to  grow  our   customer-related   foreign  exchange   business  while
maintaining an essentially unchanged inter-bank trading risk profile as measured
under our VaR methodology.

     The Securities  Trading & Institutional  Sales department  serves the fixed
income  needs  of  our  institutional  clients  and  acts  as the  fixed  income
wholesaler for our broker/dealer  subsidiary,  UBOC Investment Services, Inc. As
with our foreign exchange business, we continue to generate the vast majority of
our securities income from customer-related transactions.

     Our interest rate derivative  contracts  included as of September 30, 2003,
$3.8  billion of  derivative  contracts  entered  into as an  accommodation  for
customers.  We act as an  intermediary  and match these  contracts,  at a credit
spread,  to contracts with major dealers,  thus  neutralizing the related market
risk.

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 Board requires  quarterly reviews of our liquidity by
ALCO.  Additionally,  ALCO  conducts  monthly  ongoing  reviews of our liquidity
situation.  Liquidity  is managed  through this ALCO  coordination  process on a
Bank-wide basis, encompassing all major business units. The operating management
of liquidity is implemented through the funding and investment  functions of the
Global Markets Group.  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.



                                       49
<PAGE>



     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,  savings,  and consumer time  deposits,  combined with
average common shareholders'  equity,  funded 84 percent of average total assets
of $41.9  billion for the third quarter of 2003.  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. Liquidity may also be provided by the sale or maturity of
assets. Such assets include  interest-bearing  deposits in banks,  federal funds
sold,  securities  purchased  under  resale  agreements,   and  trading  account
securities.  The aggregate of these assets averaged $1.6 billion for the quarter
ended  September 30, 2003.  Additional  liquidity  may be provided  through loan
maturities and sales.  In the third quarter of 2003, the Company  terminated the
issuance of  commercial  paper under the  UnionBanCal  Corporation's  commercial
paper  program.   UnionBanCal  Commercial  Funding  Corporation  (a  UnionBanCal
Corporation  subsidiary)  continues to issue  commercial paper under an existing
commercial  paper  program.  The proceeds of this  commercial  paper program are
deposited in Union Bank of California, N.A. and used for Bank funding.

REGULATORY CAPITAL

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


<TABLE>
<CAPTION>

UNIONBANCAL CORPORATION

                                                                                         MINIMUM
                             SEPTEMBER 30,       DECEMBER 31,       SEPTEMBER 30,       REGULATORY
(DOLLARS IN THOUSANDS)           2002                2002               2003            REQUIREMENT
-------------------------- -----------------  -----------------  -----------------  ------------------
<S>                        <C>         <C>    <C>         <C>    <C>         <C>     <C>           <C>
CAPITAL COMPONENTS
Tier 1 capital............ $       3,617,173  $       3,667,237  $       3,632,898
Tier 2 capital............           568,163            573,858            537,737

Total risk-based capital.. $       4,185,336  $       4,241,095  $       4,170,635

Risk-weighted assets...... $      32,457,228  $      32,811,441  $      33,144,336

Quarterly average assets.. $      35,690,024  $      37,595,002  $      41,624,946


CAPITAL RATIOS               AMOUNT    RATIO    AMOUNT    RATIO    AMOUNT    RATIO     AMOUNT    RATIO
-------------------------- ----------  -----  ----------  -----  ----------  -----   ----------  -----
Total capital (to risk-
  weighted assets)........ $4,185,336  12.89% $4,241,095  12.93% $4,170,635  12.58% >$2,651,547    8.0%
                                                                                    -
Tier 1 capital (to risk-
  weighted assets)........  3,617,173  11.14   3,667,237  11.18   3,632,898  10.96  > 1,325,773    4.0
                                                                                    -
Leverage(1)...............  3,617,173  10.13   3,667,237   9.75   3,632,898   8.73  > 1,664,998    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"
                             SEPTEMBER 30,       DECEMBER 31,       SEPTEMBER 30,       REGULATORY          REGULATORY
(DOLLARS IN THOUSANDS)            2002              2002               2003            REQUIREMENT          REQUIREMENT
-------------------------- -----------------  -----------------  -----------------  ------------------  ------------------
<S>                        <C>         <C>    <C>         <C>    <C>         <C>     <C>           <C>   <C>          <C>
CAPITAL COMPONENTS
Tier 1 capital............ $       3,271,284  $       3,334,720  $       3,306,884
Tier 2 capital............           479,792            484,062            467,814

Total risk-based capital.. $       3,751,076  $       3,818,782  $       3,774,698

Risk-weighted assets...... $      31,803,655  $      32,161,047  $      32,520,713

Quarterly average assets.. $      35,160,630  $      37,019,328  $      41,044,744


CAPITAL RATIOS               AMOUNT    RATIO    AMOUNT    RATIO    AMOUNT    RATIO     AMOUNT    RATIO     AMOUNT    RATIO
-------------------------- ----------  -----  ----------  -----  ----------  -----   ----------  -----   ----------  -----
Total capital (to risk-
  weighted assets)........ $3,751,076  11,79% $3,818,782  11.87% $3,774,698  11.61% >$2,601,657    8.0% >$3,252,071   10.0%
                                                                                    -                   -
Tier 1 capital (to risk-
  weighted assets)........  3,271,284  10.29   3,334,720  10.37   3,306,884  10.17  > 1,300,829    4.0  > 1,951,243    6.0
                                                                                    -                   -
Leverage(1)...............  3,271,284   9.30   3,334,720   9.01   3,306,884   8.06  > 1,641,790    4.0  > 2,052,237    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).



                                       50
<PAGE>



     Compared  with  December 31, 2002,  our Tier 1 risk-based  capital ratio at
September  30,  2003,  decreased  22 basis  points to 10.96  percent,  our total
risk-based  capital ratio  decreased 35 basis points to 12.58  percent,  and our
leverage ratio  decreased 102 basis points to 8.73 percent.  The decrease in our
capital  ratios was  primarily  attributable  to lower Tier 1 capital  primarily
resulting from a decrease in shareholders' equity including the purchase of $300
million of our common  stock,  in  September  2003,  from BTM,  higher  goodwill
associated  with  our  recent  acquisitions  (which  reduces  both  Tier 1 and 2
capital), coupled with an increase in risk-weighted assets.

     As of September 30, 2003,  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.

CERTAIN BUSINESS RISK 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  long-term  impact of the
California energy crisis, the decline in the technology sector, recent wildfires
in Southern  California and the California state  government's  recent budgetary
crisis and continuing fiscal difficulties.  If economic conditions in California
continue to decline, we expect that our level of problem assets could increase.

     THE CONTINUING WAR ON TERRORISM COULD FURTHER  ADVERSELY AFFECT US ECONOMIC
     CONDITIONS

     Acts  or  threats  of  terrorism  and  actions  taken  by the  US or  other
governments as a result of such acts or threats have contributed to the downturn
in US economic  conditions  experienced  recently  and could  further  adversely
affect business and economic conditions in the US generally and in our principal
markets. For example, the events of September 11, 2001, caused a decrease in air
travel in the US, which adversely  affected the airline  industry and many other
travel-related industries, including those operating in California.

     ADVERSE  ECONOMIC  FACTORS  AFFECTING  CERTAIN  INDUSTRIES  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.  Accordingly, a downturn in the real estate and housing
industries  in California  could have an adverse  effect on our  operations.  In
addition,  auto leases comprise a declining portion of our total loan portfolio.
We  ceased   originating   auto  leases  in  April  2001;   however,   continued
deterioration  in the used car  market may  result in  additional  losses on the
valuation of auto lease  residuals  on our  remaining  auto  leases.  We provide
financing to businesses in a number of other industries that may be particularly
vulnerable    to    industry-specific    economic    factors,    including   the
communications/media  industry,  the retail industry,  the airline industry, the
power industry and the technology industry.  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.



                                       51
<PAGE>



     RISKS  ASSOCIATED  WITH CURTAILED  MARKET ACCESS OF POWER  COMPANIES  COULD
     AFFECT OUR PORTFOLIO CREDIT QUALITY

     The failure of Enron Corporation,  coupled with continued turbulence in the
energy markets, has significantly impacted debt ratings and equity valuations of
a broad  spectrum  of power  companies,  particularly  those  involved in energy
trading and in deregulated or non-regulated  markets.  These  developments  have
sharply  reduced  these  companies'  ability  to access  public  debt and equity
markets,  contributing to heightened liquidity pressures.  Should these negative
trends continue and/or intensify, the credit quality of certain of our borrowers
could be adversely affected.

     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,  further decreases in interest rates
could  result in an  acceleration  in the  prepayment  of loans.  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,  particularly  in a  falling  interest  rate
environment,  could  result in a decrease  in our  interest  income  relative to
interest expense.

     SHAREHOLDER  VOTES ARE CONTROLLED BY BTM; OUR INTERESTS MAY NOT BE THE SAME
     AS BTM'S INTERESTS

     BTM, a wholly owned subsidiary of Mitsubishi  Tokyo Financial Group,  Inc.,
owns a  majority  (approximately  63 percent as of  September  30,  2003) of the
outstanding  shares of our common stock.  As a result,  BTM can elect all of our
directors  and,  as a result,  can control  the vote on all  matters,  including
determinations  such as:  approval  of mergers or other  business  combinations;
sales of all or substantially all of our assets; any matters submitted to a vote
of our  shareholders;  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 common stock or other equity securities;  and other matters that
might be favorable to BTM.

     A majority of our  directors  are not officers or employees of  UnionBanCal
Corporation or any of our affiliates,  including BTM. However,  because of BTM's
control over the election of our directors,  BTM could change the composition of
our Board of  Directors  so that the Board  would not have a majority of outside
directors.  BTM's  ability  to prevent  an  unsolicited  bid for us or any other
change in  control  could have an  adverse  effect on the  market  price for our
common stock.

     POSSIBLE  FUTURE SALES OF SHARES BY BTM COULD  ADVERSELY  AFFECT THE MARKET
     FOR OUR STOCK

     BTM may sell  shares of our common  stock in  compliance  with the  federal
securities  laws. By virtue of BTM's current control of us, BTM could sell large
amounts  of shares of our  common  stock by  causing  us to file a  registration
statement  that would allow them to sell shares more easily.  In  addition,  BTM
could sell shares of our common stock without registration. 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



                                       52
<PAGE>



our common  stock.  If BTM sells or  transfers  shares of our common  stock as a
block, another person or entity could become our controlling shareholder.

     BTM'S FINANCIAL CONDITION COULD ADVERSELY AFFECT OUR OPERATIONS

     Although  we fund  our  operations  independently  of BTM and  believe  our
business is not necessarily closely related to BTM's business or outlook,  BTM's
credit ratings may affect our credit ratings.  BTM is also subject to regulatory
oversight  and review by Japanese and US  regulatory  authorities.  Our business
operations  and  expansion  plans could be  negatively  affected  by  regulatory
concerns related to the Japanese financial system and BTM.

     POTENTIAL CONFLICTS OF INTEREST WITH BTM COULD ADVERSELY AFFECT US

     BTM'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.

     Also, as part of BTM's normal risk management processes, BTM manages global
credit exposures and concentrations on an aggregate basis, including 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 BTM. We may wish to extend credit
or furnish other banking  services to the same  customers as BTM. Our ability to
do so may be limited for  various  reasons,  including  BTM's  aggregate  credit
exposure and marketing policies.

     Certain directors' and officers'  ownership interests in BTM's common stock
or service as a director  or officer or other  employee of both us and BTM could
create or appear to create  potential  conflicts of interest,  especially  since
both of us compete in the US banking industry.

     SUBSTANTIAL  COMPETITION IN THE CALIFORNIA  BANKING MARKET COULD  ADVERSELY
     AFFECT US

     Banking is a highly  competitive  business.  We compete  actively for loan,
deposit,  and  other  financial  services  business  in  California,  as well as
nationally and internationally.  Our competitors include a large number of state
and national banks, thrift institutions and major  foreign-affiliated or foreign
banks,  as well as many  financial and  non-financial  firms that offer services
similar to those offered by us. Some of our competitors are community banks that
have strong local market positions.  Other  competitors  include large financial
institutions  (such as Bank of America,  Citibank,  Washington Mutual, and Wells
Fargo) that have substantial capital,  technology and marketing resources.  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.

     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.  Recently,  a number of
foreign  banks have acquired  financial  services  companies in the US,  further
increasing competition in the US market.

     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
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.



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<PAGE>


     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 trend is likely to 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 any future
changes in laws, regulations, policies or interpretations, including legislative
and  regulatory  reactions to the terrorist  attack on September  11, 2001,  and
future acts of terrorism,  and the Enron Corporation,  WorldCom,  Inc. and other
major US corporate  bankruptcies and reports of accounting  irregularities at US
public  companies,  including  various  large  and  publicly  traded  companies.
Additionally,  our  international  activities  may be  subject  to the  laws and
regulations of the jurisdiction where 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 BTM's controlling ownership of us, laws,  regulations and
policies adopted or enforced by the Government of Japan 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  federal   government  and  its  agencies.   We  are
particularly  affected by the policies of the Federal Reserve Board (FRB), which
regulates the supply of money and credit in the US. Under  long-standing  policy
of the FRB, 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 FRB are (a) conducting open market  operations
in US government  securities,  (b) changing the discount  rates of 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 FRB may have a material  effect on our  business,
results of operations and financial condition.

     WE MAY NOT BE ABLE TO SUCCESSFULLY IMPLEMENT OUR OPERATING STRATEGIES

     From time to time,  we develop  long-term  financial  performance  goals to
guide and  measure  the  success  of our  operating  strategies.  We can make no
assurances that we will be successful in achieving these long-term goals or that
our operating strategies will be successful. Achieving success in these areas is
dependent on a number of factors,  many of which are beyond our direct  control.
Factors that may adversely affect our ability to attain our long-term  financial
performance goals include:

     o    deterioration of our asset quality;

     o    our  inability  to control  noninterest  expense,  including,  but not
          limited to, rising employee and healthcare costs;

     o    our inability to increase noninterest income;

     o    our inability to decrease reliance on revenues generated from assets;

     o    our ability to manage loan growth;

     o    our ability to find  acquisition  targets at valuation  levels we find
          attractive;

     o    regulatory and other impediments associated with making acquisitions;

     o    deterioration in general economic  conditions,  especially in our core
          markets;



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<PAGE>


     o    decreases in our net interest margin;

     o    increases in competition;

     o    adverse regulatory or legislative developments; and

     o    unexpected increases in costs related to acquisitions.

     RISKS   ASSOCIATED   WITH  POTENTIAL   ACQUISITIONS   OR   DIVESTITURES  OR
     RESTRUCTURING MAY ADVERSELY AFFECT US

     We may seek to acquire or invest in  companies,  technologies,  services or
products 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 companies at valuation levels we find
attractive and the competition  for such  opportunities  from other bidders.  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 restructuring 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,  financial condition and results
of  operations.  Acquisitions,   divestitures  or  restructuring  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 overcoming these or any other significant risks encountered.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

     A complete explanation  concerning our market risk exposure is incorporated
by  reference  from the text under the  caption  "Quantitative  and  Qualitative
Disclosures  About Market  Risk" in the Form 10-K/A for the year ended  December
31, 2002 and by reference to Part I, Item 2 of this document  under the captions
"Quantitative  and  Qualitative  Disclosure  about Interest Rate Risk Management
(Other Than Trading)," "Liquidity Risk," and "Certain Business Risk Factors."

ITEM 4. CONTROLS AND PROCEDURES

     (a)  EVALUATION  OF  DISCLOSURE  CONTROLS  AND  PROCEDURES.  Based on their
evaluation  as of  September  30,  2003,  our  principal  executive  officer and
principal  financial  officer have concluded  that our  disclosure  controls and
procedures  (as defined in Rules  13a-15(e) and 15d-15(e)  under the  Securities
Exchange Act of 1934  (Exchange  Act)) are effective to ensure that  information
required to be  disclosed  by us in reports we file or submit under the Exchange
Act is recorded,  processed,  summarized,  and reported  within the time periods
specified in Securities and Exchange Commission (SEC) rules and forms.

     (b) CHANGES IN INTERNAL  CONTROLS.  These officers have also concluded that
during the third quarter of 2003 there was no significant change in our internal
control over financial reporting that has materially affected,  or is reasonably
likely to materially affect, our internal control over financial reporting.







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<PAGE>


                           PART II. OTHER INFORMATION



ITEM 5. OTHER INFORMATION

     ANNUAL MEETING OF SHAREHOLDERS:  The Annual Meeting of Shareholders will be
held on  Wednesday,  April 28, 2004, at 9:30 a.m. upon the approval of the Board
of Directors,  expected at the December 2003 meeting. Shareholders who expect to
present a proposal at the 2004 Annual Meeting of Shareholders for publication in
the Company's proxy statement and action on the proxy form or otherwise for such
meeting must submit their  proposal by November 25, 2003.  The proposal  must be
mailed to the Corporate  Secretary of the Company at 400 California Street, Mail
Code  1-001-16,  San  Francisco,  CA 94104.  Without such notice,  proxy holders
appointed  by the Board of Directors of the Company will be entitled to exercise
their  discretionary  voting authority when the proposal is raised at the annual
meeting, without any discussion of the proposal in the proxy statement.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(A) EXHIBITS:

 NO.                                   DESCRIPTION
----      ----------------------------------------------------------------------
 3.1      Restated  Certificate of  Incorporation  of the Registrant  (effective
          September 30, 2003)(1)
 3.2      By-laws of UnionBanCal Corporation (a Delaware Corporation) (effective
          September 30, 2003)(1)
31.1      Certification  of the Chief  Executive  Officer  pursuant to 18 U.S.C.
          Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley
          Act of 2002(1)
31.2      Certification  of the Chief  Financial  Officer  pursuant to 18 U.S.C.
          Section 1350, as adopted 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)


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

(1)        Filed herewith

     (B) REPORTS ON FORM 8-K

     We furnished a report on Form 8-K on July 16, 2003  reporting  under Item 9
thereof that UnionBanCal  Corporation issued a press release concerning earnings
for the second quarter of 2003.















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<PAGE>


                                   SIGNATURES

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



                                           UNIONBANCAL CORPORATION
                                                 (Registrant)

                                       By:       /S/ NORIMICHI KANARI
                                          -------------------------------------
                                                     Norimichi Kanari
                                          PRESIDENT AND CHIEF EXECUTIVE OFFICER
                                               (Principal Executive Officer)

                                       By:       /S/ DAVID I. MATSON
                                          -------------------------------------
                                                     David I. Matson
                                                EXECUTIVE VICE PRESIDENT AND
                                                  CHIEF FINANCIAL OFFICER
                                               (Principal Financial Officer)

                                       By:      /S/ DAVID A. ANDERSON
                                          -------------------------------------
                                                    David A. Anderson
                                           SENIOR VICE PRESIDENT AND CONTROLLER
                                              (Principal Accounting Officer)


                                       Date:  November 13, 2003


















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