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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 MARCH 31, 2003


                         COMMISSION FILE NUMBER 1-15081



                             UNIONBANCAL CORPORATION



                       State of Incorporation: CALIFORNIA

                  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 Act). Yes X No
                                      ---  ---

   Number of shares of Common Stock outstanding at April 30, 2003: 150,086,567



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<PAGE>


                    UNIONBANCAL CORPORATION AND SUBSIDIARIES

                                TABLE OF CONTENTS


                                                                           PAGE
                                                                          NUMBER
                                                                          ------
PART I
FINANCIAL INFORMATION
  Consolidated Financial Highlights..........................................  2

   Item 1. Financial Statements:
  Condensed Consolidated Statements of Income................................  3
  Condensed Consolidated Balance Sheets......................................  4
  Condensed Consolidated Statements of Changes in Shareholders' Equity.......  5
  Condensed Consolidated Statements of Cash Flows............................  6
  Notes to Condensed Consolidated Financial Statements.......................  7

   Item 2. Management's Discussion and Analysis:
  Introduction............................................................... 17
  Summary.................................................................... 18
  Business Segments.......................................................... 19
  Net Interest Income........................................................ 27
  Noninterest Income......................................................... 28
  Noninterest Expense........................................................ 30
  Income Tax Expense......................................................... 30
  Loans...................................................................... 31
  Cross-Border Outstandings.................................................. 32
  Provision for Credit Losses................................................ 32
  Allowance for Credit Losses................................................ 33
  Nonperforming Assets....................................................... 37
  Loans 90 Days or More Past Due and Still Accruing.......................... 37
  Quantitative and Qualitative Disclosure about Interest Rate Risk
   Management................................................................ 38
  Liquidity.................................................................. 41
  Regulatory Capital......................................................... 42
  Certain Business Risk Factors.............................................. 43

  Item 3. Market Risk........................................................ 47

  Item 4. Controls and Procedures............................................ 47

PART II
OTHER INFORMATION
  Item 1. Legal Proceedings.................................................. 48
  Item 4. Submission of Matters to a Vote of Security Holders................ 48
  Item 6. Exhibits and Reports on Form 8-K................................... 49
Signatures................................................................... 50
Certifications............................................................... 51



<PAGE>

<TABLE>
<CAPTION>


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

                                                              AS OF AND FOR THE THREE MONTHS ENDED
                                                          -------------------------------------------
                                                             MARCH 31,          MARCH 31,     PERCENT
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)                  2002               2003        CHANGE
--------------------------------------------------------  ------------       ------------     -------

RESULTS OF OPERATIONS:
<S>                                                       <C>                <C>              <C>
  Net interest income(1)................................  $    380,973       $    391,404       2.74%
  Provision for credit losses...........................        55,000             30,000     (45.45)
  Noninterest income....................................       159,749            185,776      16.29
  Noninterest expense...................................       311,661            342,605       9.93
                                                          ------------       ------------
  Income before income taxes(1).........................       174,061            204,575      17.53
  Taxable-equivalent adjustment.........................           533                624      17.07
  Income tax expense....................................        58,751             68,434      16.48
                                                          ------------       ------------
  Net income............................................  $    114,777       $    135,517      18.07%
                                                          ============       ============
PER COMMON SHARE:
  Net income--basic.....................................  $       0.73       $       0.90      23.29%
  Net income--diluted...................................          0.73               0.89      21.92
  Dividends(2)..........................................          0.25               0.28      12.00
  Book value (end of period)............................         22.81              25.35      11.14
  Common shares outstanding (end of period).............   156,336,338        150,217,620      (3.91)
  Weighted average common shares outstanding--basic.....   156,228,149        150,616,367      (3.59)
  Weighted average common shares outstanding--diluted...   157,810,613        152,012,570      (3.67)
BALANCE SHEET (END OF PERIOD):
  Total assets..........................................  $ 36,221,931       $ 40,387,343      11.50%
  Total loans...........................................    25,098,097         26,536,272       5.73
  Nonaccrual loans......................................       452,428            386,583     (14.55)
  Nonperforming assets..................................       452,761            386,972     (14.53)
  Total deposits........................................    28,758,849         33,252,751      15.63
  Medium and long-term debt.............................       399,673            418,388       4.68
  Trust preferred securities............................       361,903            363,050       0.32
  Shareholders' equity..................................     3,566,502          3,808,025       6.77
BALANCE SHEET (PERIOD AVERAGE):
  Total assets..........................................  $ 35,083,527       $ 38,348,203       9.31%
  Total loans...........................................    25,127,757         26,723,057       6.35
  Earning assets........................................    31,976,493         34,826,771       8.91
  Total deposits........................................    27,568,947         31,078,388      12.73
  Shareholders' equity..................................     3,624,767          3,874,293       6.88
FINANCIAL RATIOS:
  Return on average assets(3)...........................          1.33%              1.43%
  Return on average shareholders' equity(3).............         12.84              14.19
  Efficiency ratio(4)...................................         57.61              59.35
  Net interest margin(1)................................          4.80               4.53
  Dividend payout ratio.................................         34.25              31.11
  Tangible equity ratio.................................          9.64               9.00
  Tier 1 risk-based capital ratio.......................         11.63              11.33
  Total risk-based capital ratio........................         13.50              13.08
  Leverage ratio........................................         10.65               9.80
  Allowance for credit losses to total loans............          2.51               2.21
  Allowance for credit losses to nonaccrual loans.......        139.11             151.64
  Net loans charged off to average total loans(3).......          0.97               0.80
  Nonperforming assets to total loans, distressed loans
  held for sale, and foreclosed assets..................          1.80               1.46
  Nonperforming assets to total assets..................          1.25               0.96

-----------
<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. Foreclosed asset expense
     was $0.1 million in the first three months of 2002 and 2003, respectively.
</FN>
</TABLE>


                                       2
<PAGE>


ITEM 1. FINANCIAL STATEMENTS

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

                                                                                  FOR THE THREE MONTHS
                                                                                     ENDED MARCH 31,
                                                                                 -------------------------
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)                                         2002         2003
-------------------------------------------------------------------------------- ------------  -----------
INTEREST INCOME
<S>                                                                                <C>          <C>
  Loans.........................................................................   $  375,798   $  362,975
  Securities....................................................................       81,336       79,863
  Interest bearing deposits in banks............................................          496          962
  Federal funds sold and securities purchased under resale agreements...........        4,059        1,677
  Trading account assets........................................................          691          927
                                                                                 ------------  -----------
  Total interest income.........................................................      462,380      446,404
                                                                                 ------------  -----------
INTEREST EXPENSE
  Domestic deposits.............................................................       59,935       41,571
  Foreign deposits..............................................................        6,264        3,206
  Federal funds purchased and securities sold under repurchase agreements.......        1,949        1,327
  Commercial paper..............................................................        3,974        2,728
  Medium and long-term debt.....................................................        2,412        1,866
  UnionBanCal Corporation--obligated mandatorily redeemable preferred securities
   of subsidiary grantor trust..................................................        3,963        3,671
  Other borrowed funds..........................................................        3,443        1,255
                                                                                 ------------  -----------
  Total interest expense........................................................       81,940       55,624
                                                                                 ------------  -----------
NET INTEREST INCOME.............................................................      380,440      390,780
  Provision for credit losses...................................................       55,000       30,000
                                                                                 ------------  -----------
  Net interest income after provision for credit losses.........................      325,440      360,780
                                                                                 ------------  -----------
NONINTEREST INCOME
  Service charges on deposit accounts...........................................       66,143       72,287
  Trust and investment management fees..........................................       36,725       32,675
  International commissions and fees............................................       18,223       19,613
  Insurance commissions.........................................................        7,153       13,005
  Card processing fees, net.....................................................        8,545        9,687
  Brokerage commissions and fees................................................        9,632        8,866
  Foreign exchange trading gains, net...........................................        6,447        6,934
  Merchant banking fees.........................................................        6,945        6,018
  Securities losses, net........................................................       (2,566)        (522)
  Other.........................................................................        2,502       17,213
                                                                                 ------------  -----------
  Total noninterest income......................................................      159,749      185,776
                                                                                 ------------  -----------
NONINTEREST EXPENSE
  Salaries and employee benefits................................................      178,876      198,107
  Net occupancy.................................................................       23,381       27,636
  Equipment.....................................................................       16,340       16,671
  Communications................................................................       13,941       13,844
  Professional services.........................................................        9,503       12,014
  Data processing...............................................................        8,991        8,484
  Foreclosed asset expense......................................................          125           51
  Other.........................................................................       60,504       65,798
                                                                                 ------------  -----------
  Total noninterest expense.....................................................      311,661      342,605
                                                                                 ------------  -----------
  Income before income taxes....................................................      173,528      203,951
  Income tax expense............................................................       58,751       68,434
                                                                                 ------------  -----------
NET INCOME......................................................................   $  114,777   $  135,517
                                                                                 ============  ===========
NET INCOME PER COMMON SHARE--BASIC..............................................   $     0.73   $     0.90
                                                                                 ============  ===========
NET INCOME PER COMMON SHARE--DILUTED............................................   $     0.73   $     0.89
                                                                                 ============  ===========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING--BASIC...............................      156,228      150,616
                                                                                 ============  ===========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING--DILUTED.............................      157,811      152,013
                                                                                 ============  ===========
</TABLE>


     See accompanying notes to condensed consolidated financial statements.


                                       3
<PAGE>

<TABLE>
<CAPTION>


                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS


                                                                         (UNAUDITED)                          (UNAUDITED)
                                                                           MARCH 31,       DECEMBER 31,         MARCH 31,
(DOLLARS IN THOUSANDS)                                                       2002               2002               2003
------------------------------------------------------------------------ -----------       ------------       ------------
ASSETS
<S>                                                                      <C>                <C>                <C>
Cash and due from banks.................................................. $1,787,942         $2,823,573         $2,480,626
Interest bearing deposits in banks.......................................    110,147            278,849            226,893
Federal funds sold and securities purchased under resale agreements......  2,109,600          1,339,700          1,736,800
                                                                         -----------       ------------       ------------
  Total cash and cash equivalents........................................  4,007,689          4,442,122          4,444,319
Trading account assets...................................................    221,179            276,021            305,102
Securities available for sale:
  Securities pledged as collateral.......................................    120,560            157,823            117,092
  Held in portfolio......................................................  5,289,210          7,180,677          7,014,363
Loans (net of allowance for credit losses: March 31, 2002, $629,367;
  December 31, 2002, $609,190; March 31, 2003, $586,197)................. 24,468,730         25,828,893         25,950,075
Due from customers on acceptances........................................    136,303             62,469            128,401
Premises and equipment, net..............................................    489,915            504,666            504,451
Intangible assets........................................................     15,292             38,518             37,541
Goodwill.................................................................     68,623            150,542            150,846
Other assets.............................................................  1,404,430          1,528,042          1,735,153
                                                                         -----------       ------------       ------------
  Total assets...........................................................$36,221,931        $40,169,773        $40,387,343
                                                                         ===========       ============       ============


LIABILITIES
Domestic deposits:
  Noninterest bearing....................................................$11,878,768        $15,537,906        $15,727,203
  Interest bearing....................................................... 14,540,336         15,258,479         15,944,421
Foreign deposits:
  Noninterest bearing....................................................    404,378            583,836            434,258
  Interest bearing.......................................................  1,935,367          1,460,594          1,146,869
                                                                         -----------       ------------       ------------
  Total deposits......................................................... 28,758,849         32,840,815         33,252,751
Federal funds purchased and securities sold under repurchase agreements..    369,565            334,379            282,135
Commercial paper.........................................................    900,851          1,038,982            852,494
Other borrowed funds.....................................................    900,360            267,047            139,821
Acceptances outstanding..................................................    136,303             62,469            128,401
Other liabilities........................................................    827,925          1,083,836          1,142,278
Medium and long-term debt................................................    399,673            418,360            418,388
UnionBanCal Corporation--obligated mandatorily redeemable preferred
  securities of subsidiary grantor trust.................................    361,903            365,696            363,050
                                                                         -----------       ------------       ------------
  Total liabilities...................................................... 32,655,429         36,411,584         36,579,318
                                                                         -----------       ------------       ------------
Commitments and contingencies

SHAREHOLDERS' EQUITY
Preferred stock:
  Authorized 5,000,000 shares, no shares issued or outstanding as of
  March 31, 2002, December 31, 2002, and March 31, 2003..................         --                 --                 --
Common stock--no stated value:
  Authorized 300,000,000 shares, issued 156,336,338 shares as of March 31,
  2002, 150,702,363 shares as of December 31, 2002, and 150,217,620 shares
  as of March 31, 2003...................................................  1,172,479            926,460            905,668
Retained earnings........................................................  2,307,150          2,591,635          2,685,019
Accumulated other comprehensive income...................................     86,873            240,094            217,338
                                                                         -----------       ------------       ------------
  Total shareholders' equity.............................................  3,566,502          3,758,189          3,808,025
                                                                         -----------       ------------       ------------
  Total liabilities and shareholders' equity.............................$36,221,931        $40,169,773        $40,387,343
                                                                         ===========       ============       ============
</TABLE>


     See accompanying notes to condensed consolidated financial statements.


                                       4
<PAGE>

<TABLE>
<CAPTION>


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


                                                                                  FOR THE THREE MONTHS ENDED MARCH 31,
                                                                          -----------------------------------------------------
(DOLLARS IN THOUSANDS)                                                              2002                          2003
------------------------------------------------------------------------- -----------------------       -----------------------
COMMON STOCK
<S>                                                                       <C>            <C>            <C>           <C>
  Balance, beginning of period........................................... $1,181,925                      $926,460
  Dividend reinvestment plan.............................................         38                            10
  Deferred compensation--restricted stock................................         (3)                           --
  Stock options exercised................................................     25,345                         5,691
  Common stock repurchased(1)............................................    (34,826)                      (26,493)
                                                                          ----------                    ----------
  Balance, end of period................................................. $1,172,479                      $905,668
                                                                          ----------                    ----------
RETAINED EARNINGS
  Balance, beginning of period........................................... $2,231,384                    $2,591,635
  Net income.............................................................    114,777     $114,777          135,517    $135,517
  Dividends on common stock(2)...........................................    (39,048)                      (42,189)
  Deferred compensation--restricted stock................................         37                            56
                                                                          ----------                    ----------
  Balance, end of period................................................. $2,307,150                    $2,685,019
                                                                          ----------                    ----------
ACCUMULATED OTHER COMPREHENSIVE INCOME
  Balance, beginning of period...........................................   $132,933                      $240,094
  Unrealized net gains on cash flow hedges, net of tax expense of $578
    and $129 in the first three months of 2002 and 2003, respectively....                     933                          208
  Less: reclassification adjustment for net gains on cash flow hedges
    included in net income, net of tax expense of $11,177 and $4,699 in
    the first three months of 2002 and 2003, respectively................                 (18,044)                      (7,587)
                                                                                         --------                     --------
  Net reduction in unrealized gains on cash flow hedges..................                 (17,111)                      (7,379)
  Unrealized holding losses arising during the period on securities
    available for sale, net of tax benefit of $18,094 and $9,331 in the
    first three months of 2002 and 2003, respectively....................                 (30,519)                     (15,063)
  Less: reclassification adjustment for losses on securities available
    for sale included in net income, net of tax benefit of $981 and $200
    in the first three months of 2002 and 2003, respectively.............                   1,585                          322
                                                                                         --------                     --------
  Net unrealized losses on securities available for sale.................                 (28,934)                     (14,741)
  Foreign currency translation adjustment, net of tax benefit of $9 and
    $394 in the first three months of 2002 and 2003, respectively........                     (15)                        (636)
                                                                                         --------                     --------
  Other comprehensive loss...............................................    (46,060)     (46,060)         (22,756)    (22,756)
                                                                          ----------     --------       ----------    --------
  Total comprehensive income.............................................                 $68,717                     $112,761
                                                                                         ========                     ========
  Balance, end of period.................................................    $86,873                      $217,338
                                                                          ----------                    ----------
  TOTAL SHAREHOLDERS' EQUITY............................................. $3,566,502                    $3,808,025
                                                                          ==========                    ==========
-----------
<FN>
(1)       Common stock repurchased includes commission costs.

(2)       Dividends per share were $0.25 and $0.28 for the first three months of
          2002 and  2003,  respectively.  Dividends  are  based  on  UnionBanCal
          Corporation's shares outstanding as of the declaration date.
</FN>

     See accompanying notes to condensed consolidated financial statements.

</TABLE>

                                       5
<PAGE>


<TABLE>
<CAPTION>

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

                                                                                       FOR THE THREE MONTHS
                                                                                          ENDED MARCH 31,
                                                                                    --------------------------
(DOLLARS IN THOUSANDS)                                                                 2002            2003
--------------------------------------------------------------------------------    ----------      ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                                   <C>             <C>
  Net income....................................................................    $  114,777      $  135,517
  Adjustments to reconcile net income to net cash provided by (used in)
    operating activities:
  Provision for credit losses...................................................        55,000          30,000
  Depreciation, amortization and accretion......................................        19,637          26,728
  Provision for deferred income taxes...........................................        28,674          25,520
  Loss on securities available for sale.........................................         2,566             522
  Net increase in prepaid expenses..............................................       (90,796)        (90,504)
  Net (increase) decrease in fees and other charges receivable..................        31,026         (60,338)
  Net (increase) decrease in trading account assets.............................         8,518         (29,081)
  Other, net....................................................................      (366,869)        (30,036)
                                                                                    ----------      ----------
  Total adjustments.............................................................      (312,244)       (127,189)
                                                                                    ----------      ----------
  Net cash provided by (used in) operating activities...........................      (197,467)          8,328
                                                                                    ----------      ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Proceeds from sales of securities available for sale..........................         1,106           2,600
  Proceeds from matured and called securities available for sale................       346,379         629,435
  Purchases of securities available for sale....................................       (11,657)       (452,657)
  Net increase in loans.........................................................      (158,071)       (145,671)
  Other, net....................................................................       (10,074)        (20,765)
                                                                                    ----------      ----------
  Net cash provided by investing activities.....................................       167,683          12,942
                                                                                    ----------      ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Net increase in deposits......................................................       202,650         411,936
  Net decrease in federal funds purchased and securities sold under repurchase
    agreements..................................................................       (49,249)        (52,244)
  Net increase (decrease) in commercial paper and other borrowed funds..........       270,151        (313,714)
  Common stock repurchased......................................................       (34,826)        (26,493)
  Payments of cash dividends....................................................       (39,143)        (42,438)
  Other, net....................................................................        23,359           5,065
                                                                                    ----------      ----------
  Net cash provided by (used in) financing activities...........................       372,942         (17,888)
                                                                                    ----------      ----------
Net increase in cash and cash equivalents.......................................       343,158           3,382
Cash and cash equivalents at beginning of period................................     3,664,954       4,442,122
Effect of exchange rate changes on cash and cash equivalents....................          (423)         (1,185)
                                                                                    ----------      ----------
Cash and cash equivalents at end of period......................................    $4,007,689      $4,444,319
                                                                                    ==========      ==========

CASH PAID DURING THE PERIOD FOR:
  Interest......................................................................    $   79,347      $   50,419
  Income taxes..................................................................           193           9,905
  Loans transferred to foreclosed assets (OREO) and/or distressed loans held
    for sale....................................................................    $      116      $       --


     See accompanying notes to condensed consolidated financial statements.
</TABLE>


                                       6
<PAGE>


                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 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 March 31, 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 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 through March 31, 2003, the Company has announced stock
repurchase plans totaling $400 million.  The Company repurchased $86 million and
$27  million  in 2002 and the first  quarter of 2003,  respectively,  as part of
these  repurchase  plans.  As of March 31,  2003,  $33 million of the  Company's
common stock is authorized for repurchase.  In addition, on August 27, 2002, the
Company  announced  that it purchased  $300 million of its common stock from its
majority  owner,  The  Bank  of   Tokyo-Mitsubishi,   Ltd.  (BTM),  which  is  a
wholly-owned  subsidiary of Mitsubishi Tokyo Financial Group,  Inc. At March 31,
2003, BTM owned  approximately  65 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,   "Accounting  for
Stock-Based  Compensation,"  as  amended,  the Company has chosen to continue to
recognize compensation expense using the intrinsic value-based method of valuing
stock options  prescribed in Accounting  Principles  Board Opinion (APB)


                                       7
<PAGE>

                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                 MARCH 31, 2003
                                   (UNAUDITED)

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

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 March 31, 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 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>


                                                                                           QUARTER ENDED
                                                                                             MARCH 31,
                                                                                      ---------------------
(DOLLARS IN THOUSANDS)                                                                   2002        2003
-------------------------------------------------------------------------------       --------     --------
<S>                                                                                   <C>          <C>
AS REPORTED NET INCOME.........................................................       $114,777     $135,517
Stock option-based employee compensation expense (determined under fair
  value based method for all awards, net of taxes).............................         (4,178)      (5,956)
                                                                                      --------     --------
Pro forma net income, after stock option-based employee compensation expense...       $110,599     $129,561
                                                                                      ========     ========
EARNINGS PER SHARE--BASIC
As reported....................................................................       $   0.73     $   0.90
Pro forma......................................................................       $   0.71     $   0.86
EARNINGS PER SHARE--DILUTED
As reported....................................................................       $   0.73     $   0.89
Pro forma......................................................................       $   0.70     $   0.85
</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 first quarters
of 2002 and 2003 was not significant.

NOTE 2--RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

     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 statements 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


                                       8
<PAGE>

                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                 MARCH 31, 2003
                                   (UNAUDITED)

NOTE 2--RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (CONTINUED)

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 in the first  quarter of 2003 and  management
believes  that it will  not  have a  material  impact  on the  Company's  future
financial position or results of operations.

     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. FIN 46 became effective upon its issuance. As of March 31,
2003,   the  Company   does  not  believe  it  has  any  VIE's  for  which  this
interpretation would be applicable.

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 months ended March 31, 2002 and 2003.

<TABLE>
<CAPTION>


                                                                 THREE MONTHS ENDED MARCH 31,
                                                         -------------------------------------------------
                                                                  2002                       2003
                                                         ----------------------      ---------------------
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)              BASIC        DILUTED        BASIC       DILUTED
------------------------------------------------------   --------      --------      --------     --------
<S>                                                      <C>           <C>           <C>          <C>
Net Income............................................   $114,777      $114,777      $135,517     $135,517
                                                         ========      ========      ========     ========
Weighted average common shares outstanding............    156,228       156,228       150,616      150,616
Additional shares due to:
  Assumed conversion of dilutive stock options........         --         1,583            --        1,397
                                                         --------      --------      --------     --------
Adjusted weighted average common shares outstanding...    156,228       157,811       150,616      152,013
                                                         ========      ========      ========     ========
Net income per share..................................   $   0.73      $   0.73      $   0.90     $   0.89
                                                         ========      ========      ========     ========
</TABLE>







                                       9
<PAGE>

                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                 MARCH 31, 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 THREE MONTHS ENDED MARCH 31,
                                 ------------------------------------------------------------------------------
(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......   (17,111)       (7,379)       (28,934)     (14,741)          (15)          (636)
                                 -------      --------        -------     --------      --------       --------
Ending balance................   $45,729      $ 96,989        $54,337     $132,709      $(12,220)      $(11,285)
                                 =======      ========        =======     ========      ========       ========
</TABLE>

<TABLE>
<CAPTION>

                                                                   MINIMUM PENSION          ACCUMULATED OTHER
                                                                 LIABILITY ADJUSTMENT      COMPREHENSIVE INCOME
                                                                 --------------------      --------------------
                                                                      FOR THE THREE MONTHS ENDED MARCH 31,
                                                                 ----------------------------------------------
(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...................................          --           --        (46,060)    (22,756)
                                                                 ------      -------       --------    --------
Ending balance.............................................      $ (973)     $(1,075)       $86,873    $217,338
                                                                 ======      =======       ========    ========

</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,  and
          extends  primarily   short-term  credit  to  corporations  engaged  in
          international  business.  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


                                       10
<PAGE>


                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                 MARCH 31, 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 page,  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 this table 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  Pacific  Rim  Corporate  Group,  with assets at March 31, 2003 of
          $337.6  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.


                                       11
<PAGE>

                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                 MARCH 31, 2003
                                   (UNAUDITED)

NOTE 5--BUSINESS SEGMENTS (CONTINUED)

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

<TABLE>
<CAPTION>

                                                         COMMUNITY BANKING
                                                          AND INVESTMENT          COMMERCIAL FINANCIAL        INTERNATIONAL
                                                          SERVICES GROUP             SERVICES GROUP           BANKING GROUP
                                                      ----------------------     ----------------------    -------------------
                                                                    AS OF AND FOR THE THREE MONTHS ENDED MARCH 31,
                                                      ------------------------------------------------------------------------
                                                        2002          2003         2002          2003       2002        2003
---------------------------------------------------   --------      --------     --------      --------    -------     -------
<S>                                                   <C>           <C>          <C>           <C>         <C>         <C>
RESULTS OF OPERATIONS (DOLLARS IN THOUSANDS):
Net interest income................................   $182,999      $214,043     $156,195      $184,067    $ 9,505     $10,220
Noninterest income.................................     93,065       106,281       45,704        53,894     16,088      15,483
                                                      --------      --------     --------      --------    -------     -------
Total revenue......................................    276,064       320,324      201,899       237,961     25,593      25,703
Noninterest expense................................    180,492       205,232       83,907        89,498     15,143      14,924
Credit expense (income)............................      9,029         7,740       46,985        49,496        495         505
                                                      --------      --------     --------      --------    -------     -------
Income before income tax expense (benefit).........     86,543       107,352       71,007        98,967      9,955      10,274
Income tax expense (benefit).......................     33,103        41,063       23,057        31,845      3,808       3,930
                                                      --------      --------     --------      --------    -------     -------
Net income (loss)..................................   $ 53,440      $ 66,289     $ 47,950      $ 67,122    $ 6,147     $ 6,344
                                                      --------      --------     --------      --------    -------     -------
TOTAL ASSETS (dollars in millions):................   $ 10,641      $ 12,300     $ 15,550      $ 15,318    $ 1,388     $ 2,146
                                                      ========      ========     ========      ========    =======     =======
</TABLE>

<TABLE>
<CAPTION>

                                                            GLOBAL                                           UNIONBANCAL
                                                        MARKETS GROUP                 OTHER                  CORPORATION
                                                    ----------------------      -------------------      ---------------------
                                                                AS OF AND FOR THE THREE MONTHS ENDED MARCH 31,
                                                    --------------------------------------------------------------------------
                                                      2002          2003         2002         2003         2002         2003
--------------------------------------------------- -------      --------       -------     -------      --------     --------
RESULTS OF OPERATIONS (DOLLARS IN THOUSANDS):
<S>                                                 <C>          <C>            <C>         <C>          <C>          <C>
Net interest income................................ $12,705      $(33,618)      $19,036     $16,068      $380,440     $390,780
Noninterest income.................................   1,518         1,526         3,374       8,592       159,749      185,776
                                                    -------      --------       -------     -------      --------     --------
Total revenue......................................  14,223       (32,092)       22,410      24,660       540,189      576,556
Noninterest expense................................   3,914         4,113        28,205      28,838       311,661      342,605
Credit expense (income)............................      50            50        (1,559)    (27,791)       55,000       30,000
                                                    -------      --------       -------     -------      --------     --------
Income (loss) before income tax expense (benefit)..  10,259       (36,255)       (4,236)     23,613       173,528      203,951
Income tax expense (benefit).......................   3,924       (13,868)       (5,141)      5,464        58,751       68,434
                                                    -------      --------       -------     -------      --------     --------
Net income (loss).................................. $ 6,335      $(22,387)      $   905     $18,149      $114,777     $135,517
                                                    -------      --------       -------     -------      --------     --------
TOTAL ASSETS (dollars in millions):................ $ 7,718      $  9,359       $   925     $ 1,264      $ 36,222     $ 40,387
                                                    =======      ========       =======     =======      ========     ========
</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.


                                       12
<PAGE>

                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                 MARCH 31, 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. The maximum length of time
over which the Company is hedging these exposures is 6.5 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 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 the cap contract  offset the increase in interest  expense caused
by the relevant LIBOR index rising above the cap's strike rate.

     Hedging  transactions  are  structured  at  inception  so that the notional
amounts of the hedge are matched with an equal principal amount of loans or CDs,
the index and repricing  frequencies  of the hedge matches those of the loans or
CDs, and the period in which the designated hedged cash flows occurs is equal to
the term of the  hedge.  As such,  most of the  ineffectiveness  in the  hedging
relationship  results from


                                       13
<PAGE>

                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                 MARCH 31, 2003
                                   (UNAUDITED)

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

the mismatch  between the timing of reset dates on the hedge versus those of the
loans or CDs. In the first quarter of 2003, the Company recognized a net gain of
$0.1 million due to ineffectiveness, which is recognized in noninterest expense,
compared to a net loss of $0.1 million in the first 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 first quarter of 2003 was a
net gain of $0.1  million,  compared to a net loss of $0.1  million in the first
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 issuance,  in order to
convert the  liability  from a fixed rate to a floating  rate  instrument.  This
strategy  mitigates the changes in fair value of the hedged  liability caused by
changes in the designated benchmark interest rate, 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.


                                       14
<PAGE>

                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                 MARCH 31, 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  transaction.  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 March 31, 2003, the Company's maximum
exposure to loss for standby and  commercial  letters of credit is $2.8  billion
and $282.4 million, respectively.

     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 March 31, 2003, the Company has a maximum exposure of $12.9
million for these agreements, which expire December 2005.

     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 March 31,
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 $2.6 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 March 31, 2003,  the
Bank had a maximum  exposure to loss under these  guarantees of $852.5  million,
which have an average term of less than one year. 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 March
31,  2003,  UnionBanCal  Corporation  had a  maximum  exposure  to loss of $33.0
million for these agreements.

NOTE 8--SUBSEQUENT EVENTS

     On April 1, 2003, the Company completed its acquisition of Tanner Insurance
Brokers, Inc, a regional insurance broker based in Pleasanton, California.

     On April 7, 2003,  the Company  signed a  definitive  agreement  to acquire
Monterey Bay Bank, a community  bank with $610 million in assets and 8 branches.
The Company will pay a consideration of


                                       15
<PAGE>

                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                 MARCH 31, 2003
                                   (UNAUDITED)

NOTE 8--SUBSEQUENT EVENTS (CONTINUED)

approximately  $96.5  million,  comprising  approximately  equal  parts cash and
common stock. The acquisition is expected to close in the third quarter of 2003.

     On April 23,  2003,  the  Board of  Directors  declared  a  quarterly  cash
dividend of $0.31 per share of common  stock.  The dividend will be paid on July
3, 2003 to shareholders of record as of June 6, 2003.

     On April 23, 2003,  the Board of Directors  authorized the repurchase of an
additional $100 million of the Company's common stock.

     On April 23, 2003, the  shareholders of the Company's common stock approved
a proposal  to change  UnionBanCal  Corporation's  state of  incorporation  from
California to Delaware.  Subject to regulatory approvals, the reincorporation is
expected to be completed by the end of the third quarter of 2003.




























                                       16
<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,  GLOBAL  POLITICAL AND GENERAL  ECONOMIC  CONDITIONS
RELATED TO THE TERRORIST ATTACKS ON SEPTEMBER 11, 2001, AND THEIR AFTERMATH, THE
WAR 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 OPERATION."

     ALL REPORTS THAT WE FILE  ELECTRONICALLY WITH THE SEC, INCLUDING THE ANNUAL
REPORT ON FORM 10-K, 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 incorporated in
California,  with  consolidated  assets of $40.4  billion at March 31, 2003.  At
March 31, 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  through  March 31,  2003,  we have  announced  stock
repurchase  plans  totaling $400  million.  We  repurchased  $86 million and $27
million in 2002 and the first  quarter of 2003,  respectively,  as part of these
repurchase  plans.  As of March 31,  2003,  $33  million of our common  stock is
authorized for repurchase. In addition, on August 27, 2002, we announced that we
purchased  $300  million of our common stock from our  majority  owner,  BTM. At
March 31, 2003, BTM owned  approximately  65 percent of our  outstanding  common
stock.


                                       17
<PAGE>


SUMMARY

     Net income was $135.5  million,  or $0.89 per diluted common share,  in the
first quarter of 2003, compared with $114.8 million, or $0.73 per diluted common
share, in the first quarter of 2002. This increase in diluted earnings per share
of $0.16,  or 22  percent,  above the first  quarter  of 2002 was due to a $26.0
million,  or 16 percent,  increase in noninterest income, a $25.0 million, or 46
percent,  decrease in provision for credit  losses,  and a $10.4  million,  or 3
percent, increase in net interest income (on a taxable-equivalent basis), partly
offset by a $30.9 million, or 10 percent, increase in noninterest expense. Other
highlights of the first quarter of 2003 include:

     o    Net interest income, on a taxable-equivalent basis, was $391.4 million
          in the first  quarter of 2003,  an  increase  of $10.4  million,  or 3
          percent,  over the first quarter of 2002.  Net interest  margin in the
          first quarter of 2003 was 4.53 percent,  a decrease of 27 basis points
          from the first quarter of 2002.

     o    A provision  for credit  losses of $30.0  million was  recorded in the
          first quarter of 2003 compared with $55.0 million in the first 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 $586.2  million,  or 152
          percent of total  nonaccrual  loans, at March 31, 2003,  compared with
          $629.4 million, or 139 percent of total nonaccrual loans, at March 31,
          2002.

     o    Noninterest income was $185.8 million in the first quarter of 2003, an
          increase of $26.0  million,  or 16 percent,  from the first quarter of
          2002.  This  increase  included  a $6.1  million  increase  in service
          charges on deposit accounts,  a decline in private capital  securities
          losses,  net of $6.8  million,  a $5.9  million  increase in insurance
          commissions  mostly  associated with our acquisition of John Burnham &
          Company,  and lower residual  value  writedowns on auto leases of $5.7
          million,  partly  offset  by a $4.1  million  decrease  in  trust  and
          investment management fees.

     o    Noninterest  expense was $342.6  million in the first quarter of 2003,
          an increase of $30.9 million, or 10 percent, over the first quarter of
          2002. Salaries and employee benefits increased by $19.2 million, or 11
          percent, primarily attributable to higher salaries of $9.4 million and
          higher employee benefits of $8.6 million.

     o    Income tax expense in the first quarter of 2003 was $68.4  million,  a
          34 percent  effective  income tax rate. For the first quarter of 2002,
          the effective income tax rate was also 34 percent.

     o    Return  on  average  assets  increased  to 1.43  percent  in the first
          quarter of 2003 compared to 1.33 percent in the first quarter of 2002.
          Our return on average  shareholders' equity increased to 14.19 percent
          in the first  quarter of 2003  compared to 12.84  percent in the first
          quarter of 2002.

     o    Total loans at March 31, 2003 were $26.5 billion,  an increase of $1.4
          billion,  or 6  percent,  from  March 31,  2002  mainly  due to a $1.3
          billion increase in our residential mortgage portfolio.

     o    Nonperforming assets were $387.0 million at March 31, 2003, a decrease
          of $65.8 million,  or 15 percent,  from March 31, 2002.  Nonperforming
          assets, as a percentage of total assets,  decreased to 0.96 percent at
          March 31, 2003,  compared  with 1.25 percent at March 31, 2002.  Total
          nonaccrual loans were $386.6 million at March 31, 2003,  compared with
          $452.4  million at March 31, 2002,  contributing  to a decrease in the
          ratio of nonaccrual  loans to total loans of 1.46 percent at March 31,
          2003 from 1.80 percent at March 31, 2002.

     o    Our Tier 1 and total risk-based  capital ratios were 11.33 percent and
          13.08 percent,  respectively,  at March 31, 2003,  compared with 11.63
          percent  and  13.50  percent,  respectively,  at March 31,  2002.  Our
          leverage  ratio was 9.80 percent at March 31, 2003 compared with 10.65
          percent at March 31, 2002.


                                       18
<PAGE>


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 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  table  reflects 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.




                                       19
<PAGE>


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

<TABLE>
<CAPTION>

                                                        COMMUNITY BANKING
                                                         AND INVESTMENT          COMMERCIAL FINANCIAL          INTERNATIONAL
                                                         SERVICES GROUP             SERVICES GROUP             BANKING GROUP
                                                     ---------------------      ----------------------      ------------------
                                                                    AS OF AND FOR THE THREE MONTHS ENDED MARCH 31,
                                                     -------------------------------------------------------------------------
                                                       2002         2003          2002          2003         2002       2003
                                                     --------     --------      --------      --------     -------     -------
RESULTS OF OPERATIONS AFTER PERFORMANCE CENTER
  EARNINGS (DOLLARS IN THOUSANDS):
<S>                                                  <C>          <C>           <C>           <C>          <C>         <C>
  Net interest income..............................  $182,999     $214,043      $156,195      $184,067     $ 9,505     $10,220
  Noninterest income...............................    93,065      106,281        45,704        53,894      16,088      15,483
                                                     --------     --------      --------      --------     -------     -------
  Total revenue....................................   276,064      320,324       201,899       237,961      25,593      25,703
  Noninterest expense..............................   180,492      205,232        83,907        89,498      15,143      14,924
  Credit expense (income)..........................     9,029        7,740        46,985        49,496         495         505
                                                     --------     --------      --------      --------     -------     -------
  Income (loss) before income tax expense (benefit)    86,543      107,352        71,007        98,967       9,955      10,274
  Income tax expense (benefit).....................    33,103       41,063        23,057        31,845       3,808       3,930
                                                     --------     --------      --------      --------     -------     -------
  Net income (loss)................................  $ 53,440     $ 66,289      $ 47,950      $ 67,122     $ 6,147     $ 6,344
                                                     ========     ========      ========      ========     =======     =======
PERFORMANCE CENTER EARNINGS (DOLLARS IN THOUSANDS):
  Net interest income..............................  $    222     $    186      $   (346)     $   (191)    $    --     $     4
  Noninterest income...............................   (10,874)      (8,706)       13,412        13,184         885         332
  Noninterest expense..............................    (8,050)      (7,047)        6,721         7,148         766         252
  Net income (loss)................................    (1,627)        (930)        3,961         3,653          73          52
  Total loans (dollars in millions)................        25           27           (45)          (47)         --          --
AVERAGE BALANCES (DOLLARS IN MILLIONS):
  Total loans(1)...................................  $  9,543     $ 11,130      $ 14,121      $ 13,516     $ 1,016     $ 1,525
  Total assets.....................................    10,417       12,198        15,754        15,414       1,310       1,923
  Total deposits(1)................................    14,791       17,166         7,906         9,969       1,558       1,518
FINANCIAL RATIOS:
  Risk adjusted return on capital(2)...............        38%          42%           12%           16%         38%         44%
  Return on average assets(2)......................      2.08         2.20          1.23          1.76        1.90        1.34
  Efficiency ratio(3)..............................      65.4         64.1          41.6          37.6        59.2        58.1

</TABLE>

<TABLE>
<CAPTION>

                                                              GLOBAL                                             UNIONBANCAL
                                                          MARKETS GROUP                  OTHER                   CORPORATION
                                                      ----------------------     ----------------------      --------------------
                                                                   AS OF AND FOR THE THREE MONTHS ENDED MARCH 31,
                                                      ---------------------------------------------------------------------------
                                                        2002          2003         2002           2003         2002         2003
                                                      -------      --------      -------        -------      --------     --------
RESULTS OF OPERATIONS AFTER PERFORMANCE CENTER
  EARNINGS (DOLLARS IN THOUSANDS):
<S>                                                   <C>          <C>           <C>            <C>          <C>          <C>
  Net interest income............................     $12,705      $(33,618)     $19,036        $16,068      $380,440     $390,780
  Noninterest income.............................       1,518         1,526        3,374          8,592       159,749      185,776
                                                      -------      --------      -------        -------      --------     --------
  Total revenue..................................      14,223       (32,092)      22,410         24,660       540,189      576,556
  Noninterest expense............................       3,914         4,113       28,205         28,838       311,661      342,605
  Credit expense (income)........................          50            50       (1,559)       (27,791)       55,000       30,000
                                                      -------      --------      -------        -------      --------     --------
  Income (loss) before income tax expense (benefit)    10,259       (36,255)      (4,236)        23,613       173,528      203,951
  Income tax expense (benefit)...................       3,924       (13,868)      (5,141)         5,464        58,751       68,434
                                                      -------      --------      -------        -------      --------     --------
  Net income (loss)..............................     $ 6,335      $(22,387)     $   905        $18,149      $114,777     $135,517
                                                      =======      ========      =======        =======      ========     ========
PERFORMANCE CENTER EARNINGS (DOLLARS IN THOUSANDS):
  Net interest income............................     $    --      $   (102)     $   124        $   103      $     --     $     --
  Noninterest income.............................      (6,634)       (8,072)       3,211          3,262            --           --
  Noninterest expense............................      (1,015)       (1,628)       1,578          1,275            --           --
  Net income (loss)..............................      (3,470)       (4,042)       1,063          1,267            --           --
  Total loans (dollars in millions)..............          --            --           20             20            --           --
AVERAGE BALANCES (DOLLARS IN MILLIONS):
  Total loans(1).................................     $   100      $    214      $   348        $   338      $ 25,128     $ 26,723
  Total assets...................................       6,725         7,967          878            846        35,084       38,348
  Total deposits(1)..............................       2,416         1,207          898          1,218        27,569       31,078
FINANCIAL RATIOS:
  Risk adjusted return on capital(2).............           5%           (9)%         na             na            na           na
  Return on average assets(2)....................        0.38         (1.15)          na             na          1.33%        1.43%
  Efficiency ratio(3)............................        27.5         (12.8)          na             na          57.6         59.3

-----------
<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.  Foreclosed  asset  expense  was $0.1  million  in both  the  first
     quarters of 2002 and 2003.

na = not applicable

</FN>
</TABLE>

                                       20
<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 first quarter of 2003, net income  increased  $12.8  million,  or 24
percent,  compared to the first quarter of 2002.  Total revenue  increased $44.3
million, or 16 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 $31.0 million,  or 17 percent, in net interest income over the prior
year. Excluding auto lease residual writedowns of $6.0 million and $0.3 million,
in the  first  quarter  of  2002  and  2003,  respectively,  and the  impact  of
performance center earnings,  noninterest income was $5.3 million, or 4 percent,
higher than the prior year  primarily due to our  acquisition  of John Burnham &
Company, in the fourth quarter of 2002, and higher deposit-related service fees.
Noninterest expense increased $24.7 million, or 14 percent, in the first quarter
of 2003 compared to the first 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 first quarter of 2002.

     In 2002,  the Community  Banking and Investment  Services Group  emphasized
growth in 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
March 31, 2003,  residential  loans have grown by $1.3  billion,  or 25 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 de novo branching.  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.

     The Community  Banking and  Investment  Services  Group is comprised of six
major divisions:  Community Banking,  Wealth Management,  Institutional Services
and Asset Management,  Consumer Asset Management,  Government and Not-For-Profit
Markets, and Insurance Services.

     COMMUNITY BANKING serves its customers through 261 full-service branches in
California,  6 full-service branches in Oregon and Washington,  and a network of
538 proprietary  ATMs.  Customers may also access our services 24 hours a day by
telephone or through our BANK@HOME  product 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;

     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.


                                       21
<PAGE>


     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 13 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. As
          we announced on April 30, 2002, we acquired a  substantial  portion of
          the trust and  institutional  custody  business  of a bank  located in
          Southern California.

     CONSUMER  ASSET  MANAGEMENT is 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

     Union  Bank  of  California   is  a  member  of  MasterCard   International
Incorporated ("MCI"), VISA U.S.A., Inc. and VISA International,  Inc. (together,
"Visa"),  is an issuer of debit cards,  primarily of the MCI "MasterMoney" card,
and is an MCI and Visa merchant bank card services bank.

     In 1996,  Wal-Mart  Stores,  Inc. and several other  retailers sued MCI and
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 are a party to these suits,  and neither will be


                                       22
<PAGE>


directly liable for these settlements.  However, MCI or Visa may seek to assess,
or assert claims against,  their members to fund the  settlements.  In addition,
even if no direct claim is asserted against members,  the  implementation of the
settlements could adversely affect their operations.

     In the year ended December 31, 2002, interchange income from our debit card
operations was less than one percent of our gross revenues. While our 2003 debit
card  interchange  income  can  be  expected  to  be  reduced  somewhat  if  the
settlements  are approved and implemented in the current year, we cannot predict
what effect the  settlements  will have on the  competitive  environment  or our
future earnings from debit card operations.

     GOVERNMENT  AND  NOT-FOR-PROFIT  MARKETS  provides a full range of treasury
management,   investment,   and  trust  services  to  government   entities  and
not-for-profit organizations.

     The  division,  which  primarily  focuses  on  local,  state,  and  federal
agencies,  includes  an  expanding  product  offering  to  the  Native  American
government  market.  Niche markets have been developed that service colleges and
universities,   trade  associations,   cultural   institutions,   and  religious
non-profit  organizations.  The  division's  strategy  is to expand  its  market
presence by  continued  delivery of cash  management  products,  internet  based
technology solutions,  and expanding its tax-exempt lending capabilities to meet
existing clients' needs.

     INSURANCE  SERVICES  provides  a range  of  risk  management  services  and
insurance  products to business and retail customers.  The group, which includes
our fourth quarter 2001  acquisition of  Armstrong/Robitaille,  Inc., a regional
insurance  broker,  and our fourth  quarter 2002  acquisition  of John Burnham &
Company,  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.

     In the first quarter of 2003, net income  increased  $19.2  million,  or 40
percent,  compared to the first quarter of 2002. Net interest  income  increased
$27.9 million, or 18 percent, partially attributable to the impact of increasing
deposit  balances and a lower cost of funds  resulting  from the lower  interest
rate


                                       23
<PAGE>



environment.  Beginning in 2003, the transfer  pricing credit for funds provides
for a floor on  analyzed  DDA  balances,  which was  triggered  during the first
quarter  of 2003.  Had such a floor  existed in the first  quarter of 2002,  net
interest income would have been higher by approximately  $11 million.  Excluding
lower net losses in the private  equity  portfolio  of $6.8 million in the first
quarter of 2003, noninterest income increased $1.4 million, or 3 percent. This 3
percent increase was mainly attributable to higher deposit-related service fees.
Noninterest  expense  increased $5.6 million,  or 7 percent,  compared to a year
earlier due to higher  expenses to support  increased  product sales and deposit
volume.   Credit  expense  increased  $2.5  million  mainly  attributable  to  a
refinement in the RAROC allocation of capital and expected losses.

     The group's  initiatives during 2002 included  expanding  wholesale deposit
activities  and  increasing  domestic trade  financing.  Loan growth  strategies
included  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 Services  Division,  which provides deposit and
          cash  management  expertise  to  clients in the  middle-market,  large
          corporate market and specialized industries;

     o    the  Institutional  and  Deposit  Services  Division,  which  provides
          deposit  and  cash   management   expertise  to  clients  in  specific
          deposit-intensive industries;

     o    the  Corporate  Capital  Markets  Division,   which  provides  limited
          merchant and investment banking related products and services;

     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

     o    the National  Banking  Division,  which provides  custom  financing to
          middle-market and large corporate clients in their defined  industries
          and geographic markets.

     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 focuses on providing  correspondent banking
and trade  finance  related  products  and services to  international  financial
institutions  worldwide,  primarily in Asia.  This focus  includes  products and
services  such as letters of credit,  international  payments,  collections  and
financing  of mostly  short-term  transactions.  The group also  serves  certain
foreign  firms and US  corporate  clients in


                                       24
<PAGE>


selected  countries where we have branches,  including Hong Kong, Japan,  Korea,
the Philippines and Taiwan. In the US, the group serves mostly  subsidiaries and
affiliates of non-Japanese Asian companies and US  branches/agencies  of foreign
banks. The majority of the revenue generated by the International  Banking Group
is from customers domiciled outside of the US.

     In the first  quarter of 2003,  net income  increased  $0.2  million,  or 3
percent,  compared  to the first  quarter  of 2002.  Total  revenue in the first
quarter of 2003 increased $0.1 million, or less than 1 percent,  compared to the
first quarter of 2002. Net interest income increased $0.7 million, or 8 percent,
from the first  quarter of 2002,  mainly due to higher loan volume.  Noninterest
income was $0.6  million,  or 4 percent,  lower than the first  quarter of 2002,
mainly  attributable to lower merchant card activity in the current year, mostly
offset by higher foreign  remittance and  collection  commissions,  reflecting a
strategic focus on this business. Noninterest expense decreased $0.2 million, or
1 percent,  compared  to the first  quarter of 2002,  with the  majority of that
decrease  attributable to merchant card activity.  Credit expense was relatively
unchanged  from the first quarter of 2002.  The  International  Banking  Group's
business revolves around short-term trade financing,  mostly to banks,  which we
believe tends to result in  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 our
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 first quarter of 2003,  net loss was $22.4  million  compared to net
income of $6.3 million in the first quarter of 2002.  Total revenue in the first
quarter of 2003  decreased by $46.3  million,  or 326  percent,  compared to the
first quarter of 2002,  resulting from a $46.3 million  decrease in net interest
income.  The decrease in net interest  income was  primarily  attributable  to a
higher transfer  pricing residual in the current quarter caused by 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 more short-term lending rates. Beginning in 2003, the transfer pricing
credit  for funds  provides  for a floor on  analyzed  DDA  balances,  which was
triggered  during the first quarter 2003.  Had such a floor existed in the first
quarter of 2002, net interest  income would have declined by  approximately  $11
million.  Compared  to  the  first  quarter  of  2002,  noninterest  income  was
relatively unchanged in the first quarter of 2003. Compared to the first quarter
of 2002, noninterest expense increased $0.2 million, or 5 percent.

     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


                                       25
<PAGE>


          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  Pacific  Rim  Corporate  Group,  with assets at March 31, 2003 of
          $337.6  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.

     Net income for "Other" in the first quarter of 2003 was $18.1 million.  The
results were impacted by the following factors:

     o    Credit expense  (income) of ($27.8)  million was due to the difference
          between the $30.0 million in provision  for credit  losses  calculated
          under our US GAAP methodology and the $57.8 million in expected losses
          for  the  reportable  business  segments,  which  utilizes  the  RAROC
          methodology;

     o    Net  interest  income  of  $16.1  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 $8.6 million; and

     o    Noninterest expense of $28.8 million.

     Net income for "Other" in the first quarter of 2002 was $0.9  million.  The
results were impacted by the following factors:

     o    Credit  expense  (income) of ($1.6)  million was due to the difference
          between the $55.0 million in provision  for credit  losses  calculated
          under our US GAAP methodology and the $56.6 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 $3.4 million; and

     o    Noninterest expense of $28.2 million.








                                       26
<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
                                     ----------------------------------------------------------------------------------------
                                               MARCH 31, 2002                                  MARCH 31, 2003
                                     -----------------------------------------      -----------------------------------------
                                                         INTEREST      AVERAGE                           INTEREST     AVERAGE
                                       AVERAGE           INCOME/        YIELD/        AVERAGE            INCOME/       YIELD/
(DOLLARS IN THOUSANDS)                 BALANCE          EXPENSE(1)      RATE(1)       BALANCE           EXPENSE(1)     RATE(1)
-----------------------------------  -----------        ---------      -------      -----------        ----------     -------
ASSETS
Loans:(2)
<S>                                  <C>                <C>               <C>       <C>                <C>               <C>
  Domestic.........................  $24,088,142        $ 368,062         6.17%     $25,186,678        $  355,073        5.70%
  Foreign(3).......................    1,039,615            7,922         3.09        1,536,379             8,166        2.16
Securities--taxable................    5,552,344           80,663         5.81        7,014,825            79,179        4.52
Securities--tax-exempt.............       38,233              991        10.37           41,943             1,014        9.67
Interest bearing deposits in banks.       84,408              496         2.38          203,432               962        1.92
Federal funds sold and securities
  purchased under resale agreements      936,382            4,059         1.76          536,114             1,677        1.27
Trading account assets.............      237,369              720         1.23          307,400               957        1.26
                                     -----------        ---------                   -----------        ----------
  Total earning assets.............   31,976,493          462,913         5.84       34,826,771           447,028        5.18
                                                        ---------                                      ----------
Allowance for credit losses........    (644,379)                                      (603,240)
Cash and due from banks............    1,942,621                                      2,094,976
Premises and equipment, net........      496,269                                        506,964
Other assets.......................    1,312,523                                      1,522,732
                                     -----------                                    -----------
  Total assets.....................  $35,083,527                                    $38,348,203
                                     ===========                                    ===========
LIABILITIES
Domestic deposits:
  Interest bearing.................  $ 7,459,506           23,157         1.26      $ 9,365,182            18,809        0.81
  Savings and consumer time........    3,549,262           16,970         1.94        3,819,545            12,316        1.31
  Large time.......................    3,485,482           19,808         2.30        2,414,309            10,446        1.75
Foreign deposits(3)................    1,749,251            6,264         1.45        1,384,177             3,206        0.94
                                     -----------        ---------                   -----------        ----------
  Total interest bearing deposits..   16,243,501           66,199         1.65       16,983,213            44,777        1.07
                                     -----------        ---------                   -----------        ----------
Federal funds purchased and
  securities sold under repurchase
  agreements.......................      541,182            1,949         1.46          517,511             1,327        1.04
Commercial paper...................      919,259            3,974         1.75          923,327             2,728        1.20
Other borrowed funds...............      698,053            3,443         2.00          172,870             1,255        2.94
Medium and long-term debt..........      399,989            2,412         2.45          399,729             1,866        1.89
UnionBanCal Corporation--obligated
  mandatorily redeemable preferred
  securities of subsidiary grantor
  trust............................      352,300            3,963         4.46          351,654             3,671        4.13
                                     -----------        ---------                   -----------        ----------
 Total borrowed funds..............    2,910,783           15,741         2.19        2,365,091            10,847        1.85
                                     -----------        ---------                   -----------        ----------
  Total interest bearing liabilities  19,154,284           81,940         1.73       19,348,304            55,624        1.16
                                                        ---------                                      ----------
Noninterest bearing deposits.......   11,325,446                                     14,095,175
Other liabilities..................      979,030                                      1,030,431
                                     -----------                                    -----------
  Total liabilities................   31,458,760                                     34,473,910
SHAREHOLDERS' EQUITY
Common equity......................    3,624,767                                      3,874,293
                                     -----------                                    -----------
  Total shareholders' equity.......    3,624,767                                      3,874,293
                                     -----------                                    -----------
  Total liabilities and
  shareholders' equity.............  $35,083,527                                    $38,348,203
                                     ===========                                    ===========
Net interest income/margin
  (taxable-equivalent basis).......                       380,973         4.80%                           391,404        4.53%
Less: taxable-equivalent adjustment                           533                                             624
                                                        ---------                                      ----------
  Net interest income..............                     $ 380,440                                      $  390,780
                                                        =========                                      ==========
-----------
<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>

                                       27
<PAGE>


     Net interest income, on a  taxable-equivalent  basis, was $391.4 million in
the first quarter of 2003,  compared with $381.0 million in the first quarter of
2002. This increase of $10.4 million, or 3 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, partly offset by significantly lower yields
on our earning  assets.  Decreasing  market rates resulted in lower rates on our
interest  bearing  liabilities  of 57 basis points on average  balances of $19.3
billion,  which was partly offset by a lower average yield of 66 basis points on
average earning assets of $34.8 billion,  which was favorably impacted by higher
interest rate derivatives  income of $5.4 million.  Mitigating the impact of the
lower interest rate  environment  on our net interest  margin was an increase in
average earning assets of $2.8 billion,  primarily in residential mortgage loans
and  securities,  funded by a $2.8 billion,  or 25 percent,  increase in average
noninterest  bearing deposits.  The resulting impact of these changes on our net
interest margin was a decrease of 27 basis points, to 4.53 percent.

     Average  earning  assets were $34.8  billion in the first  quarter of 2003,
compared  with $32.0  billion in 2002.  This growth was  attributable  to a $1.5
billion, or 26 percent,  increase in average securities and a $1.6 billion, or 6
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 $1.5 billion  increase in average  residential  mortgages,  which was a
result of a strategic portfolio shift from more volatile commercial loans. Other
loan activities  included an increase in average commercial  mortgages of $521.6
million and a decrease in average commercial, financial, and industrial loans of
$404.9 million.

     Deposit growth,  especially in our title and escrow industries,  has been a
continued  strength,  contributing  significantly  to our  lower  cost of  funds
year-over-year.  Average  noninterest  bearing deposits were $2.8 billion, or 25
percent, higher in the first quarter of 2003 over the prior year, which included
a $0.8 billion increase in average title and escrow deposits.

NONINTEREST INCOME

<TABLE>
<CAPTION>

                                                        FOR THE THREE MONTHS ENDED
                                                ------------------------------------------------
                                                                             INCREASE (DECREASE)
                                                MARCH 31,      MARCH 31,     -------------------
(DOLLARS IN THOUSANDS)                             2002           2003        AMOUNT     PERCENT
--------------------------------------------    ---------      ---------     -------     -------
<S>                                              <C>            <C>          <C>            <C>
Service charges on deposit accounts.........     $ 66,143       $ 72,287     $ 6,144        9.29%
Trust and investment management fees........       36,725         32,675      (4,050)     (11.03)
International commissions and fees..........       18,223         19,613       1,390        7.63
Insurance commissions.......................        7,153         13,005       5,852       81.81
Card processing fees, net...................        8,545          9,687       1,142       13.36
Brokerage commissions and fees..............        9,632          8,866        (766)      (7.95)
Foreign exchange trading gains, net.........        6,447          6,934         487        7.55
Merchant banking fees.......................        6,945          6,018        (927)     (13.35)
Securities losses, net......................       (2,566)          (522)      2,044      (79.66)
Other.......................................        2,502         17,213      14,711      587.97
                                                ---------      ---------     -------
  Total noninterest income..................     $159,749       $185,776     $26,027       16.29%
                                                =========      =========     =======
</TABLE>


     In the first quarter of 2003,  noninterest  income was $185.8  million,  an
increase of $26.0 million,  or 16 percent,  over the first quarter of 2002. This
increase was mainly  attributable to a $6.1 million  increase in service charges
on deposit  accounts,  $5.9  million  increase in insurance  commissions  mostly
associated  with our  acquisition  of John  Burnham &  Company,  a $4.8  million
decrease  in net  unrealized  losses on private  capital  securities,  and lower
residual  value  writedowns on auto leases of $5.7  million,  partly offset by a
$4.1 million  decrease in trust and  investment  management  fees.  In addition,
securities losses,  net, were $0.5 million in the first quarter of 2003 compared
to securities losses, net, of $2.6 million in the first quarter of 2002.


                                       28
<PAGE>


     Revenue from service  charges on deposit  accounts  was $72.3  million,  an
increase  of 9  percent  over the  first  quarter  of 2002.  This  increase  was
primarily  attributable  to a 24 percent  increase in quarterly  average  demand
deposits  and  reductions  in the  earnings  credit  rates,  caused by the lower
interest  rate  environment  on analyzed  deposit  accounts,  which  resulted in
customers  paying fees for  services  rather than  increasing  required  deposit
balances.

     Trust and investment management fees were $32.7 million, a decrease of $4.1
million,  or 11  percent,  over the first  quarter  of 2002.  This  decrease  is
primarily  attributable  to the decline in equity market values and a continuing
shift  by our  clients  toward  lower  margin  fixed  income  and  money  market
investments.  Total assets under  administration  of $132.1 billion at March 31,
2003 decreased by $6.7 billion, or 5 percent, from March 31, 2002.

     Insurance   commissions  were  $13.0  million  reflecting  the  incremental
revenues associated with our acquisition of John Burnham & Company in the fourth
quarter of 2002 and growth in  insurance  commissions  at  Armstrong/Robitaille,
Inc.

     Card  processing  fees,  net, were $9.7 million,  an increase of 13 percent
over the first quarter of 2002.  This increase was primarily  attributable to an
increase in consumer  usage of our enhanced  Gold and  Platinum  versions of our
standard "MasterMoney" card (debit card) aimed at stimulating consumer usage for
higher  dollar  purchases  and an  increase  in the volume of credit card drafts
deposited by merchants.  Effective first quarter of 2003,  merchant  transaction
processing  expenses were  reclassified to card processing fees, net, to reflect
our agent relationship for these transactions. The reclassification reduced both
card  processing  fees and  merchant  transaction  processing  expense  by $11.7
million for the first quarter of 2002.

     Securities  losses,  net, were $0.5 million compared to securities  losses,
net, of $2.6  million in the prior year.  In the  current  quarter,  we realized
gains of $0.2 million on the sale of securities,  offset by permanent writedowns
on private capital securities of $0.7 million.  In the first quarter of 2002, we
realized  net  gains  of $0.4  million  on the  sale of  securities,  offset  by
permanent writedowns on private capital securities of $3.0 million.

     Other  noninterest  income was $17.2 million,  an increase of $14.7 million
from the first quarter of 2002. This increase was mainly  attributable to a $4.8
million decrease in net unrealized losses on private capital  securities,  lower
residual  value  writedowns on auto leases of $5.7  million,  and a $3.3 million
insurance recovery from the September 11, 2001 World Trade Center attack.
















                                       29
<PAGE>


NONINTEREST EXPENSE

<TABLE>
<CAPTION>

                                                           FOR THE THREE MONTHS ENDED
                                                ------------------------------------------------
                                                                             INCREASE (DECREASE)
                                                MARCH 31,      MARCH 31,     -------------------
(DOLLARS IN THOUSANDS)                             2002           2003        AMOUNT     PERCENT
----------------------------------------------  ---------      ---------     -------     -------
<S>                                              <C>            <C>          <C>            <C>
Salaries and other compensation...............   $142,423       $153,060     $10,637        7.47%
Employee benefits.............................     36,453         45,047       8,594       23.58
                                                ---------      ---------     -------
  Salaries and employee benefits..............    178,876        198,107      19,231       10.75
Net occupancy.................................     23,381         27,636       4,255       18.20
Equipment.....................................     16,340         16,671         331        2.03
Communications................................     13,941         13,844         (97)      (0.70)
Software......................................     11,510         12,076         566        4.92
Professional services.........................      9,503         12,014       2,511       26.42
Advertising and public relations..............     10,008          9,667        (341)      (3.41)
Data processing...............................      8,991          8,484        (507)      (5.64)
Intangible asset amortization.................        884          2,477       1,593      180.20
Foreclosed asset expense......................        125             51         (74)     (59.20)
Other.........................................     38,102         41,578       3,476        9.12
                                                ---------      ---------     -------
  Total noninterest expense...................   $311,661       $342,605     $30,944       9.93%
                                                =========      =========     =======

</TABLE>

     In the first quarter of 2003,  noninterest  expense was $342.6 million,  an
increase of $30.9 million,  or 10 percent,  over the first quarter of 2002. This
increase was primarily due to a $19.2 million  increase in salaries and employee
benefits,  a $4.3  million  increase in net  occupancy  expense,  a $2.5 million
increase in professional services expense, a $1.6 million increase in intangible
asset amortization, and a $3.5 million increase in other noninterest expense.

     Salaries  and  employee  benefits  were $198.1  million,  an increase of 11
percent over the first quarter of 2002. This increase was primarily attributable
to annual  merit  increases,  higher  staff  levels  associated  with our recent
acquisitions,  and increased health benefits  expense,  other payroll taxes, and
401(k) plan expenses.

     Net occupancy expense was $27.6 million, an increase of 18 percent over the
first  quarter of 2002.  This  increase  was  primarily  attributable  to recent
acquisitions,   de  novo  branch  creations,   other  facilities   restructuring
initiatives and higher property insurance.

     Professional  services expense was $12.0 million, an increase of 26 percent
over the first  quarter of 2002.  This increase was  primarily  attributable  to
increased legal service expenses.

     Intangible asset amortization was $2.5 million,  an increase of 180 percent
from the first quarter of 2002. This increase was primarily  associated with our
acquisitions in the third and fourth quarters of 2002.

     Other noninterest  expense was $41.6 million, an increase of 9 percent over
the first  quarter of 2002.  This  increase  was  primarily  attributable  to an
increase in  unguaranteed  low-income  housing  credit  investments  expense and
higher operating losses.

INCOME TAX EXPENSE

     Income  tax  expense  in the  first  quarter  of 2003  was  $68.4  million,
resulting in a 34 percent  effective  income tax rate.  For the first quarter of
2002, the effective income tax rate was also 34 percent.







                                       30
<PAGE>

LOANS

     The following table shows loans outstanding by loan type.

<TABLE>
<CAPTION>
                                                                                                     PERCENT CHANGE TO
                                                                                                    MARCH 31, 2003 FROM:
                                                                                                ----------------------------
                                                 MARCH 31,       DECEMBER 31,      MARCH 31,    MARCH 31,       DECEMBER 31,
(DOLLARS IN THOUSANDS)                             2002              2002            2003         2002              2002
------------------------------------------     -----------       ------------    -----------    ---------       ------------
<S>                                            <C>                <C>             <C>               <C>              <C>
Domestic:
  Commercial, financial and industrial....     $10,963,101        $10,338,508    $ 9,989,430        (8.88)%          (3.38)%
  Construction............................       1,096,869          1,285,204      1,222,501        11.45            (4.88)
   Mortgage:
  Residential.............................       5,350,998          6,382,227      6,666,441        24.58             4.45
  Commercial..............................       3,691,561          4,150,178      4,189,565        13.49             0.95
                                               -----------       ------------    -----------
  Total mortgage..........................       9,042,559         10,532,405     10,856,006        20.05             3.07
   Consumer:
  Installment.............................       1,088,716            909,787        881,136       (19.07)           (3.15)
  Revolving lines of credit...............         906,110          1,102,771      1,125,186        24.18             2.03
                                               -----------       ------------    -----------
  Total consumer..........................       1,994,826          2,012,558      2,006,322         0.58            (0.31)
  Lease financing.........................         933,012            812,918        756,673       (18.90)           (6.92)
                                               -----------       ------------    -----------
  Total loans in domestic offices.........      24,030,367         24,981,593     24,830,932         3.33            (0.60)
Loans originated in foreign branches......       1,067,730          1,456,490      1,705,340        59.72            17.09
                                               -----------       ------------    -----------
  Total loans.............................     $25,098,097        $26,438,083    $26,536,272         5.73%            0.37%
                                               ===========       ============    ===========
</TABLE>


     Our  lending  activities  are  predominantly   domestic,  with  such  loans
comprising 94 percent of the total loan portfolio at March 31, 2003. Total loans
at March 31,  2003,  were $26.5  billion,  an  increase  of $1.4  billion,  or 6
percent,  from  March 31,  2002.  The  increase  was mainly  attributable  to an
increase in the residential  mortgage portfolio of $1.3 billion,  an increase in
the loans  originated in foreign branches of $638 million and an increase in the
commercial mortgage portfolio of $498 million, partly offset by a decline in the
commercial,  financial  and  industrial  loan  portfolio  of $974  million and a
decline in lease financing of $176 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 $10.0  billion,  or 38 percent of total loans,  at March 31, 2003,
compared with $11.0  billion,  or 44 percent of total loans,  at March 31, 2002.
The decrease of $1.0  billion,  or 9 percent,  from the prior year was primarily
attributable to current economic  conditions that has reduced loan demand,  loan
sales, and reductions in our exposure in  nonrelationship  syndicated loans. The
reduction in commercial,  financial, and industrial loans is 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).
We expect to continue to pursue this strategy into 2004.

     The construction loan portfolio totaled $1.2 billion, or 5 percent of total
loans,  at March 31, 2003,  compared  with $1.1  billion,  or 4 percent of total
loans, at March 31, 2002. This growth of $126 million,  or 11 percent,  from the
prior year was primarily attributable to a reasonably stable Southern California
housing market, despite the slowdown in the economy.

     Commercial  mortgages were $4.2 billion,  or 16 percent of total loans,  at
March 31, 2003,  compared with $3.7 billion,  or 15 percent,  at March 31, 2002.
The mortgage  loan  portfolio  consists of loans on


                                       31
<PAGE>


commercial and  industrial  projects  primarily in  California.  The increase in
commercial  mortgages of $498 million,  or 13 percent,  from March 31, 2002, was
primarily due to demand in the Southern California real estate market.

     Residential  mortgages were $6.7 billion,  or 25 percent of total loans, at
March 31, 2003,  compared  with $5.4 billion,  or 21 percent of total loans,  at
March 31, 2002.  The increase in  residential  mortgages of $1.3 billion,  or 25
percent,  from March 31,  2002,  continues  to be  influenced  by our  strategic
decision  to increase  our  residential  mortgage  portfolio  through  increased
in-house production and additional wholesale and correspondent  channels.  While
we hold most of the loans we originate,  we sell most of our 30-year, fixed rate
residential mortgage loans.

     Consumer loans totaled $2.0 billion,  or 8 percent of total loans, at March
31, 2003,  compared with $2.0 billion, or 8 percent of total loans, at March 31,
2002.  The  slight  increase  of $11.5  million,  or 1  percent,  was  primarily
attributable to an increase in home equity loans,  partially  offset by pay-offs
related to exiting the automobile  dealer lending  business in the third quarter
of 2000.

     Lease  financing  totaled $756.7  million,  or 3 percent of total loans, at
March 31, 2003,  compared with $933.0  million,  or 4 percent of total loans, at
March 31,  2002.  As we  previously  announced,  effective  April 20,  2001,  we
discontinued our auto leasing activity.

     Loans originated in foreign branches totaled $1.7 billion,  or 6 percent of
total loans,  at March 31, 2003,  compared with $1.1 billion,  or 4 percent,  at
March 31, 2002. The increase in loans  originated in foreign  branches of $637.6
million,  or 60 percent,  from March 31, 2002,  was  primarily  attributable  to
borrowings  from  financial  institutions  due  to  low US  interest  rates,  in
comparison  with higher  local  interest  rates,  which made  financing of trade
transactions more attractive and increased lending in Canada.

CROSS-BORDER OUTSTANDINGS

     Our  cross-border  outstandings  reflect  certain  additional  economic and
political  risks that are not  reflected in domestic  outstandings.  These risks
include those arising from exchange rate  fluctuations  and  restrictions on the
transfer of funds. The following table sets forth our cross-border  outstandings
as of March 31,  2002,  December  31, 2002 and March 31,  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>
March 31, 2002
Korea...........................     $458            $--               $46              $504
December 31, 2002
Korea...........................     $599            $--               $75              $674
March 31, 2003
Korea...........................     $651            $--               $90              $741

</TABLE>


PROVISION FOR CREDIT LOSSES

     We recorded a $30 million  provision for credit losses in the first quarter
of 2003,  compared  with a $55 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.


                                       32

<PAGE>


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  spans  what  we  believe   constitutes  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," 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);

     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;


                                       33
<PAGE>

     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 181 percent of total
nonaccrual  loans.  At March 31, 2003, our total allowance for credit losses was
$586  million,  or 2.21 percent of the total loan  portfolio  and 152 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,
"Accounting  by Creditors  for  Impairment  of a  Loan--Income  Recognition  and
Disclosures."  These  accounting  standards  prescribe the measurement  methods,
income  recognition and  disclosures  related to impaired loans. At December 31,
2002,  total  impaired loans were $337 million,  and the  associated  impairment
allowance  was $121  million,  compared  with  $387  million  and $140  million,
respectively, at March 31, 2003.

     During  the first  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.
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.

     As a result of management's assessment of factors, including: the continued
slow US economy;  the adverse impact on the airline industry of the war in Iraq,
severe acute  respiratory  syndrome  (SARS),  and the  generally  weak  economy;
uncertain,  although improving,  conditions in the communications/media,  power,
and other  sectors  in  domestic  markets  in which we  operate;  and growth and
changes in the  composition  of the loan  portfolio,  we  recorded a $30 million
provision in the first quarter of 2003.



                                       34
<PAGE>


     CHANGES IN THE FORMULA AND SPECIFIC ALLOWANCES

     At March 31, 2003, the formula allowance was $281 million, compared to $294
million at December 31, 2002, a decrease of $13 million.  The specific allowance
was $140  million at March 31,  2003,  compared to $121  million at December 31,
2002, an increase of $19 million.  This  increase in the specific  allowance was
primarily due to new nonaccrual credits,  mirrored, in part, by a similar reason
for the decrease in the formula allowance.

     CHANGES IN THE UNALLOCATED ALLOWANCE

     At March 31, 2003, the unallocated allowance was $165 million,  compared to
$194 million at December 31, 2002, a decrease of $29 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   communications/media   industry,   management
          considered  the  short  term  adverse  effects  of the  war in Iraq on
          advertising  revenues,  consumer  spending  and the  general  economic
          environment,  which  could  be in  the  range  of $16  million  to $36
          million.

     o    With  respect  to  the  commercial  real  estate  sector,   management
          considered  the cyclical  weakening in commercial  real estate markets
          reflecting weak demand,  as well as the specific  weakness in Northern
          California  resulting  from  regional  over  dependence on the hi-tech
          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 power companies and utilities,  management  considered
          the adverse effects of continued low wholesale  power prices,  ongoing
          accounting  concerns,  and  uncertainties   regarding  the  course  of
          deregulation on borrowers in the power industry, which could be in the
          range of $15 million to $30 million.

     o    With  respect  to  cross-border   loans  and  acceptances  to  certain
          Asia/Pacific  Rim countries,  management  considered the weak economic
          conditions  in  that  region  and the  reduced  strength  of  Japanese
          corporate parent companies,  which could be in the range of $9 million
          to $17 million.

     o    With respect to the retail sector,  management  considered the adverse
          effects of the weak economy and low  consumer  spending in January and
          February 2003, which followed a lackluster 2002 holiday season,  which
          could be in the range of $7 million to $14 million.

     o    With respect to leasing, management considered the growing problems of
          the airline industry including  weakness in financial  performance and
          in collateral  values,  exacerbated  by the war in Iraq and the recent
          outbreak  of SARS,  which  could be in the range of $7  million to $13
          million.

     o    With respect to the  technology  industry,  management  considered the
          adverse  effects of  continuing  excess  capacity,  depressed  capital
          spending and further  decelerations in consumer spending,  which could
          be in the range of $5 million to $10 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


                                       35
<PAGE>


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
                                                                                       ENDED MARCH 31,
                                                                                    ---------------------
(DOLLARS IN THOUSANDS)                                                                2002         2003
--------------------------------------------------------------------------------    --------     --------
<S>                                                                                 <C>          <C>
Balance, beginning of period....................................................    $634,509     $609,190
Loans charged off:
  Commercial, financial and industrial..........................................      62,226       37,826
  Mortgage......................................................................         180           --
  Consumer......................................................................       2,599        2,656
  Lease financing...............................................................         833       19,018
                                                                                    --------     --------
  Total loans charged off.......................................................      65,838       59,500
Recoveries of loans previously charged off:
  Commercial, financial and industrial..........................................       4,516        5,579
  Mortgage......................................................................          95          106
  Consumer......................................................................         908          723
  Lease financing...............................................................         201          118
                                                                                    --------     --------
  Total recoveries of loans previously charged off..............................       5,720        6,526
                                                                                    --------     --------
  Net loans charged off.........................................................      60,118       52,974
Provision for credit losses.....................................................      55,000       30,000
Foreign translation adjustment and other net additions (deductions).............         (24)         (19)
                                                                                    --------     --------
Balance, end of period..........................................................    $629,367     $586,197
                                                                                    ========     ========
Allowance for credit losses to total loans......................................        2.51%        2.21%
Provision for credit losses to net loans charged off............................       91.49        56.63
Net loans charged off to average loans outstanding for the period(1)............        0.97         0.80

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

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


     Total loans  charged  off in the first  quarter of 2003  decreased  by $6.3
million  from the  first  quarter  of  2002,  primarily  due to a $24.4  million
decrease in  commercial,  financial and  industrial  loans  charged off,  partly
offset by an $18.2 million increase in lease financing charge offs.  Charge-offs
reflect  the  realization  of  losses  in the  portfolio  that  were  recognized
previously through provisions for credit losses.

     First quarter 2003 recoveries of loans previously  charged off increased by
$0.8 million from the first quarter of 2002. The percentage of net loans charged
off to average loans  outstanding  for the first quarter of 2003 decreased by 17
basis points from the same period in 2002. At March 31, 2003,  the allowance for
credit  losses  exceeded the  annualized  net loans charged off during the first
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.




                                       36
<PAGE>


NONPERFORMING ASSETS

<TABLE>
<CAPTION>


                                                                MARCH 31,       DECEMBER 31,      MARCH 31,
(DOLLARS IN THOUSANDS)                                             2002             2002            2003
--------------------------------------------------------------  ---------       ------------      ---------
<S>                                                              <C>                <C>            <C>
Commercial, financial and industrial..........................   $422,900           $276,415       $273,196
Commercial mortgage...........................................     26,426             23,980         25,675
Lease financing...............................................      2,631             36,294         84,712
Loan originated in foreign branches...........................        471                 --          3,000
                                                                ---------       ------------      ---------
  Total nonaccrual loans......................................    452,428            336,689        386,583
Foreclosed assets.............................................        333                715            389
                                                                ---------       ------------      ---------
  Total nonperforming assets..................................   $452,761           $337,404       $386,972
                                                                =========       ============      =========
Allowance for credit losses...................................   $629,367           $609,190       $586,197
                                                                =========       ============      =========
Nonaccrual loans to total loans...............................       1.80%              1.27%          1.46%
Allowance for credit losses to nonaccrual loans...............     139.11             180.94         151.64
Nonperforming assets to total loans, distressed loans
  held for sale and foreclosed assets.........................       1.80               1.28           1.46
Nonperforming assets to total assets..........................       1.25               0.84           0.96

</TABLE>


     At March 31, 2003, nonperforming assets totaled $387.0 million, an increase
of $49.6  million,  or 15 percent,  from  December  31,  2002.  The increase was
primarily due to our decision to place additional airplane leases on nonaccrual.
Of the $84.7 million of leases reported as nonaccrual,  $16.0 million relates to
two airplane leases that are in negotiation to convert to operating leases. When
these lease terms are  completed,  which is expected  during 2003, the airplanes
will be recorded as other assets and  depreciated  over their  remaining  useful
lives.

     Nonaccrual  loans as a percentage of total loans were 1.46 percent at March
31, 2003, compared with 1.80 percent at March 31, 2002.  Nonperforming assets as
a percentage  of total loans,  distressed  loans held for sale,  and  foreclosed
assets were 1.46  percent at March 31,  2003,  compared to 1.80 percent at March
31, 2002.

LOANS 90 DAYS OR MORE PAST DUE AND STILL ACCRUING

<TABLE>
<CAPTION>

                                                                    MARCH 31,       DECEMBER 31,      MARCH 31,
(DOLLARS IN THOUSANDS)                                                2002              2002            2003
------------------------------------------------------------------  ---------       ------------      ---------
<S>                                                                   <C>                 <C>           <C>
Commercial, financial and industrial..............................    $ 1,680             $1,705        $10,413
Construction......................................................         --                679             --
Mortgage:
  Residential.....................................................      8,561              3,211          5,818
  Commercial......................................................      1,567                506            803
                                                                    ---------       ------------      ---------
  Total mortgage..................................................     10,128              3,717          6,621
Consumer and other................................................      1,893              2,072          2,123
                                                                    ---------       ------------      ---------
  Total loans 90 days or more past due and still accruing.........    $13,701             $8,173        $19,157
                                                                    =========       ============      =========
</TABLE>






                                       37
<PAGE>


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 "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
market risk  management to the Asset & Liability  Management  Committee  (ALCO),
which is 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 also reports quarterly
to ALCO on the effectiveness of our hedging  activities.  In addition,  periodic
reviews by internal audit 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


                                       38
<PAGE>


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 first  quarter of 2003,  we entered into $1 billion of
derivative  hedges,  including  $500  million  in  receive-fixed  swaps and $500
million in floors,  to offset the adverse impact that  declining  interest rates
would have on the interest  income  generated by our  variable  rate  commercial
loans.  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 filed on December 31, 2002.  In
addition,  we  continued  to increase  the size of our  securities  portfolio in
response to strong growth in core deposits, which respond more slowly to changes
in market rates than wholesale liabilities. Together, our hedging and investment
activities  resulted in a marginally asset sensitive 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  investment  securities
portfolio)  when long rates  decline.  Prepayments  depress NII even if interest
rates do not change  because  the cash flows from the  prepaid  assets that were
booked at higher  rates  must be  reinvested  at lower  prevailing  rates.  As a
result,  a continuation  of 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 no change, scenario. The following table sets forth the simulation
results in both the up and down 200 basis point ramp  scenarios  as of March 31,
2003(1):


                                             DECEMBER 31,      MARCH 31,
(DOLLARS IN MILLIONS)                            2002            2003
-------------------------------------------  ------------      ---------
+200 basis points..........................      $ 16.9         $ 15.4
as a percentage of base case NII...........        1.13%          1.04%
-200 basis points..........................      $(17.4)        $(15.3)
as a percentage of base case NII...........        1.16%          1.04%

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

(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.

     EaR in the down 200 basis point  scenario  was $15.3  million,  or 1.04% 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 percent. 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 March 31, 2003, the difference between
adjusted  NII in the base case and  adjusted NII after a gradual 100 basis point
downward ramp was minus $4.8 million, or .32% 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


                                       39
<PAGE>


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.

     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,  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
or rates 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 VaR during the year for our trading
activities.

<TABLE>
<CAPTION>

                                        DECEMBER 31, 2002            MARCH 31, 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        $155    $293    $67
Securities........................       213     543     45         207     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


                                       40
<PAGE>


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.  In 2002, we continued 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 group 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  include $4.6 billion of derivative
contracts  entered  into  as  an  accommodation  for  customers.  We  act  as an
intermediary  and match these  contracts at a profit with  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.

     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 81 percent of average total assets
of $38.3  billion for the first 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 $1.0 billion for the quarter
ended  March  31,  2003.  Additional  liquidity  may be  provided  through  loan
maturities and sales.














                                       41
<PAGE>


REGULATORY CAPITAL

     The  following  table  summarizes  our  risk-based  capital,  risk-weighted
assets, and risk-based capital ratios.


<TABLE>
<CAPTION>


UNIONBANCAL CORPORATION

                                                                                              MINIMUM
                                  MARCH 31,         DECEMBER 31,        MARCH 31,           REGULATORY
(DOLLARS IN THOUSANDS)              2002                2002               2003             REQUIREMENT
---------------------------  -----------------   -----------------   -----------------   -----------------
CAPITAL COMPONENTS
<S>                              <C>                <C>                <C>                <C>         <C>
Tier 1 capital.............      $ 3,729,481        $ 3,667,237        $ 3,739,690
Tier 2 capital.............          601,042            573,858            576,214
                             -----------------   -----------------   -----------------
Total risk-based capital...      $ 4,330,523        $ 4,241,095        $ 4,315,904
                             =================   =================   =================
Risk-weighted assets.......      $32,077,375        $32,811,441        $33,001,706
                             =================   =================   =================
Quarterly average assets...      $35,010,127        $37,595,002        $38,169,532
                             =================   =================   =================

CAPITAL RATIOS                 AMOUNT    RATIO     AMOUNT    RATIO     AMOUNT    RATIO      AMOUNT   RATIO
--------------               ----------  -----   ----------  -----   ----------  -----    ---------- -----
Total capital (to risk-
  weighted assets)...........$4,330,523  13.50%  $4,241,095  12.93%  $4,315,904  13.08%  >$2,640,136   8.0%
                                                                                         -
Tier 1 capital (to risk-
  weighted assets)........... 3,729,481  11.63    3,667,237  11.18    3,739,690  11.33   > 1,320,068   4.0
                                                                                         -

Leverage(1).................. 3,729,481  10.65    3,667,237   9.75    3,739,690   9.80   > 1,526,781   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"
                                  MARCH 31,         DECEMBER 31,        MARCH 31,           REGULATORY            REGULATORY
(DOLLARS IN THOUSANDS)              2002                2002               2003             REQUIREMENT           REQUIREMENT
----------------------       -----------------   -----------------   -----------------   -----------------   --------------------
CAPITAL COMPONENTS
<S>                             <C>                 <C>                 <C>               <C>         <C>     <C>          <C>
Tier 1 capital...............   $ 3,399,757         $ 3,334,720         $ 3,448,720
Tier 2 capital...............       489,666             484,062             486,329
                             -----------------   -----------------   -----------------
Total risk-based capital.....   $ 3,889,423         $ 3,818,782         $ 3,935,049
                             =================   =================   =================
Risk-weighted assets.........   $31,442,559         $32,161,047         $32,389,193
                             =================   =================   =================
Quarterly average assets.....   $34,514,704         $37,019,328         $37,368,882
                             =================   =================   =================

CAPITAL RATIOS                 AMOUNT    RATIO    AMOUNT     RATIO     AMOUNT    RATIO      AMOUNT   RATIO      AMOUNT    RATIO
--------------               ----------  -----   -------     -----   ----------  -----    ---------- -----    ----------  -----

Total capital (to risk-
  weighted assets). .        $3,889,423  12.37%  $3,818,782  11.87%  $3,935,049  12.15%  >$2,591,135   8.0%  >$3,238,919   10.0%
                                                                                         -                   -
Tier 1 capital (to risk-
  weighted assets)...         3,399,757  10.81    3,334,720  10.37    3,448,720  10.65   > 1,295,568   4.0   > 1,943,352    6.0
                                                                                         -                   -

Leverage(1)..........         3,399,757   9.85    3,334,720   9.01    3,448,720   9.23   > 1,494,755   4.0   > 1,868,444    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).

     Compared  with  December 31, 2002,  our Tier 1 risk-based  capital ratio at
March 31, 2003, increased 15 basis points to 11.33 percent, our total risk-based
capital ratio increased 15 basis points to 13.08 percent, and our leverage ratio
increased 5 basis points to 9.80 percent. The increase in our capital ratios was
primarily  attributable to an increase in shareholders' equity, partly offset by
an increase in risk-weighted assets.

     As of March 31, 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.


                                       42
<PAGE>


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  and  the
California state government's budgetary difficulties.  If economic conditions in
California continue to decline, we expect that our level of problem assets could
increase.

     THE CONTINUING WAR ON TERRORISM  CONTRIBUTES TO THE CONTINUING  DOWNTURN IN
     US ECONOMIC CONDITIONS

     On-going  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
continuing downturn in US economic conditions 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.
Similarly,  a  portion  of our  total  loan  portfolio  is to  borrowers  in the
agricultural industry.  Adverse weather conditions,  combined with low commodity
prices, may adversely affect the agricultural  industry and,  consequently,  may
impact our business  negatively.  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  retailing  industry,  the  airlines
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.

     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.


                                       43
<PAGE>

     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  65  percent  as of  March  31,  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 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


                                       44
<PAGE>


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 in a new
type of  financial  services  company  called  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.

     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


                                       45
<PAGE>


(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,  (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;

     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


                                       46
<PAGE>


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.  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 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," and "Certain Business Risk Factors."

ITEM 4. CONTROLS AND PROCEDURES

     (a)  EVALUATION  OF  DISCLOSURE  CONTROLS  AND  PROCEDURES.  Based on their
evaluation as of March 31, 2003, our principal  executive  officer and principal
financial officer have concluded that our disclosure controls and procedures (as
defined in Rules  13a-14(c) and 15d-14(c)  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
there were no significant  changes in our internal  controls or in other factors
that could  significantly  affect these controls subsequent to the date of their
evaluation  and  that  there  were  no  significant   deficiencies  or  material
weaknesses  in such  controls,  and therefore  there were no corrective  actions
taken.


















                                       47
<PAGE>


                           PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

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

     Union Bank of California,  our major  subsidiary (the Bank), has been named
in two suits  pending  in the  United  States  District  Court  for the  Central
District  of  California,  Christensen  v.  Union Bank of  California  (formerly
captioned as Rockoff v Union Bank of California et al)(filed  December 21, 2001)
and Neilson v Union Bank of California et al (filed  September 4, 2002), and one
suit in Los Angeles  County  Superior  Court,  Kilpatrick v Orrick  Harrington &
Sutcliffe, et al, (filed April 22, 2003 as to the Bank). The plaintiffs in these
suits  collectively  seek in excess of $250 million alleged to have been lost by
those who  invested  money in various  investment  arrangements  conducted by an
individual  named Reed Slatkin.  Mr. Slatkin is alleged to have been operating a
fraudulent  investment  scheme  commonly  referred to as a "Ponzi"  scheme.  The
plaintiffs in the  Christensen  case are various  investors in the  arrangements
conducted  by Mr.  Slatkin and the  plaintiffs  in the Neilson case include both
investors  and the trustee of Mr.  Slatkin's  bankruptcy  estate.  A substantial
majority of those who invested  with Mr.  Slatkin had no  relationship  with the
Bank. A small minority,  comprising less than five percent of the investors, had
custodial  accounts  with the Bank.  The Neilson case seeks to impose  liability
upon the Bank and two other financial  institutions for both the losses suffered
by those custodial  customers as well as investors who had no relationship  with
the Bank.  The plaintiff in the  Kilpatrick  case is an individual  investor who
seeks  recovery of funds  placed in an account for a limited  liability  company
which he formed with Slatkin.

     Another  suit has been filed with  regard to an  unrelated  "Ponzi"  scheme
perpetrated by PinnFund, USA, located in San Diego,  California.  The victims of
this scheme have filed suit against the Bank seeking $235  million.  They assert
that the Bank improperly  opened and administered a deposit  account,  which was
used by PinnFund in furtherance of the fraud.

     Although these claims are in the preliminary  stages, the Bank has numerous
legal defenses,  which it will invoke.  Based on our evaluation to date of these
claims,  management  believes  that they will not result in a  material  adverse
effect on our  financial  position or results of  operations.  In  addition,  we
believe that the disposition of all other claims currently pending will also not
have a  material  adverse  effect  on  our  financial  position  or  results  of
operations.

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

     Set forth below is information  concerning each matter  submitted to a vote
at the Annual Meeting of Shareholders on April 23, 2003 ("Annual Meeting"):

     DIRECTORS:  Each of the following persons was elected as a director to hold
office  until  the  2004  Annual  Meeting  of   Shareholders  or  until  earlier
retirement, resignation or removal.


NOMINEE                                      FOR            WITHHELD
---------------------------------------  -----------       ----------
David R. Andrews.......................  130,710,843       16,719,455
L. Dale Crandall.......................  130,704,785       16,725,513
Richard D. Farman......................  146,619,580          810,717
Stanley F. Farrar......................  146,613,958          816,339
Michael J. Gillfillan..................  135,750,466       11,679,832
Richard C. Hartnack....................  146,603,769          826,529
Kaoru Hayama...........................  146,588,985          841,312
Norimichi Kanari.......................  146,605,273          825,024
Satoru Kishi...........................  122,312,537       25,117,760
Monica C. Lozano.......................  146,607,666          822,631


                                       48
<PAGE>


NOMINEE                                      FOR            WITHHELD
---------------------------------------  -----------       ----------
Mary S. Metz...........................  130,655,666       16,774,631
Takahiro Moriguchi.....................  145,961,740        1,468,558
J. Fernando Niebla.....................  146,601,287          829,010
Charles R. Rinehart....................  135,674,894       11,755,403
Carl W. Robertson......................  146,602,322          827,975
Takaharu Saegusa.......................  146,266,920        1,163,377
Robert M. Walker.......................  146,570,441          859,857


     PROPOSAL  TO  CHANGE  STATE OF  INCORPORATION:  Proposal  No.  2 to  change
UnionBanCal  Corporation's  state of  incorporation  from California to Delaware
received the following votes:


     For:                 124,211,679
     Against:              16,338,848
     Abstain:                 396,681


     AUDITORS:  Proposal No. 3 to ratify the  selection of Deloitte & Touche LLP
as independent auditors of UnionBanCal Corporation received the following votes:


     For:                 127,287,113
     Against:              17,845,989
     Abstain:                  59,313


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

(A)       EXHIBITS:


  NO.                                 DESCRIPTION
-------   ----------------------------------------------------------------------

  2.0     Agreement  and Plan of  Merger,  dated as of March  11,  2003  between
          UnionBanCal  Corporation,   a  Delaware  Corporation  and  UnionBanCal
          Corporation, a California Corporation(1)

 99.1     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(2)

 99.2     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(2)

-----------

(1)  Incorporated  by reference to Annex A to the UnionBanCal  Definitive  Proxy
     Statement on Schedule 14A, filed on March 20, 2003

(2)  Provided herewith

(B)  REPORTS ON FORM 8-K

     We filed a report on Form 8-K on January 7, 2003 reporting under Item 5 and
Item 7  thereof  to file  certain  exhibits  in  connection  with  UnionBanCal's
Registration Statement on Form S-23 (file No. 333-03040)

     We furnished a report on Form 8-K on March 14, 2003 reporting  under Item 9
thereof,  which  included  the  written  certification  statements  of our chief
executive  officer and chief financial officer with respect to our annual report
on Form 10-K for the period ended  December 31, 2002,  filed with the Securities
and Exchange  Commission  on March 14,  2003,  as required by section 906 of the
Sarbanes-Oxley Act of 2002 (18 U.S.C. section 1350).

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


                                       49
<PAGE>


                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) 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:  May 14, 2003
















                                       50
<PAGE>


CERTIFICATIONS

I, Norimichi Kanari, certify that:

     1.   I have  reviewed  this  quarterly  report on Form 10-Q of  UnionBanCal
          Corporation (the "Registrant");

     2.   Based on my  knowledge,  this  quarterly  report  does not contain any
          untrue  statement of a material  fact or omit to state a material fact
          necessary to make the statements  made, in light of the  circumstances
          under which such  statements were made, not misleading with respect to
          the period covered by this quarterly report;

     3.   Based on my knowledge,  the financial statements,  and other financial
          information  included in this quarterly report,  fairly present in all
          material respects the financial  condition,  results of operations and
          cash flows of the Registrant as of, and for, the periods  presented in
          this quarterly report;

     4.   The Registrant's  other  certifying  officer and I are responsible for
          establishing  and maintaining  disclosure  controls and procedures (as
          defined in Exchange  Act Rules  13a-14 and 15d-14) for the  Registrant
          and we have:

          a)   designed such  disclosure  controls and procedures to ensure that
               material  information  relating to the Registrant,  including its
               consolidated  subsidiaries,  is made known to us by others within
               those  entities,  particularly  during  the  period in which this
               quarterly report is being prepared;

          b)   evaluated  the  effectiveness  of  the  Registrant's   disclosure
               controls and  procedures as of a date within 90 days prior to the
               filing date of this quarterly report (the "Evaluation Date"); and

          c)   presented  in this  quarterly  report our  conclusions  about the
               effectiveness of the disclosure  controls and procedures based on
               our evaluation as of the Evaluation Date;

     5.   The Registrant's other certifying officer and I have disclosed,  based
          on our most recent  evaluation,  to the Registrant's  auditors and the
          audit  committee  of  Registrant's  board  of  directors  (or  persons
          performing the equivalent function):

          a)   all  significant  deficiencies  in the  design  or  operation  of
               internal  controls which could adversely  affect the Registrant's
               ability to record,  process,  summarize and report financial data
               and have  identified for the  Registrant's  auditors any material
               weaknesses in internal controls; and

          b)   any fraud,  whether or not material,  that involves management or
               other employees who have a significant  role in the  Registrant's
               internal controls; and

     6.   The Registrant's other certifying officer and I have indicated in this
          quarterly  report  whether  or not there were  significant  changes in
          internal controls or in other factors that could significantly  affect
          internal   controls   subsequent  to  the  date  of  our  most  recent
          evaluation,   including   any   corrective   actions  with  regard  to
          significant deficiencies and material weaknesses.

Date: May 14, 2003



                                      By:         /S/ NORIMICHI KANARI
                                         ---------------------------------------
                                                      Norimichi Kanari
                                                        PRESIDENT AND
                                                  CHIEF EXECUTIVE OFFICER



                                       51
<PAGE>


I, David I. Matson, certify that:

     1.   I have  reviewed  this  quarterly  report on Form 10-Q of  UnionBanCal
          Corporation (the "Registrant");

     2.   Based on my  knowledge,  this  quarterly  report  does not contain any
          untrue  statement of a material  fact or omit to state a material fact
          necessary to make the statements  made, in light of the  circumstances
          under which such  statements were made, not misleading with respect to
          the period covered by this quarterly report;

     3.   Based on my knowledge,  the financial statements,  and other financial
          information  included in this quarterly report,  fairly present in all
          material respects the financial  condition,  results of operations and
          cash flows of the Registrant as of, and for, the periods  presented in
          this quarterly report;

     4.   The Registrant's  other  certifying  officer and I are responsible for
          establishing  and maintaining  disclosure  controls and procedures (as
          defined in Exchange  Act Rules  13a-14 and 15d-14) for the  Registrant
          and we have:

          a)   designed such  disclosure  controls and procedures to ensure that
               material  information  relating to the Registrant,  including its
               consolidated  subsidiaries,  is made known to us by others within
               those  entities,  particularly  during  the  period in which this
               quarterly report is being prepared;

          b)   evaluated  the  effectiveness  of  the  Registrant's   disclosure
               controls and  procedures as of a date within 90 days prior to the
               filing date of this quarterly report (the "Evaluation Date"); and

          c)   presented  in this  quarterly  report our  conclusions  about the
               effectiveness of the disclosure  controls and procedures based on
               our evaluation as of the Evaluation Date;

     5.   The Registrant's other certifying officer and I have disclosed,  based
          on our most recent  evaluation,  to the Registrant's  auditors and the
          audit  committee  of  Registrant's  board  of  directors  (or  persons
          performing the equivalent function):

          a)   all  significant  deficiencies  in the  design  or  operation  of
               internal  controls which could adversely  affect the Registrant's
               ability to record,  process,  summarize and report financial data
               and have  identified for the  Registrant's  auditors any material
               weaknesses in internal controls; and

          b)   any fraud,  whether or not material,  that involves management or
               other employees who have a significant  role in the  Registrant's
               internal controls; and

     6.   The Registrant's other certifying officer and I have indicated in this
          quarterly  report  whether  or not there were  significant  changes in
          internal controls or in other factors that could significantly  affect
          internal   controls   subsequent  to  the  date  of  our  most  recent
          evaluation,   including   any   corrective   actions  with  regard  to
          significant deficiencies and material weaknesses.

Date: May 14, 2003



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



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