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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, 2004

                         COMMISSION FILE NUMBER 1-15081

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

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

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

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

     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes X  No
                                             ---   ---

     Indicate by check mark whether the registrant is an  accelerated  filer (as
defined in Rule 12b-2 of the Act). Yes X  No
                                      ---   ---


   Number of shares of Common Stock outstanding at April 30, 2004: 147,576,209




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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 Stockholders' Equity...    5
    Condensed Consolidated Statements of Cash Flows........................    6
    Notes to Condensed Consolidated Financial Statements...................    7
  Item 2. Management's Discussion and Analysis of Financial Condition and
          Results of Operations:
    Introduction...........................................................   21
    Executive Overview.....................................................   21
    Financial Performance..................................................   23
    Net Interest Income....................................................   25
    Noninterest Income.....................................................   27
    Noninterest Expense....................................................   27
    Income Tax Expense.....................................................   27
    Loans..................................................................   28
    Cross-Border Outstandings..............................................   30
    Provision for Credit Losses............................................   30
    Allowance for Credit Losses............................................   31
    Nonperforming Assets...................................................   35
    Loans 90 Days or More Past Due and Still Accruing......................   36
    Quantitative and Qualitative Disclosures About Market Risk.............   36
    Liquidity Risk.........................................................   40
    Regulatory Capital.....................................................   41
    Business Segments......................................................   42
    Certain Business Risk Factors..........................................   49
  Item 3. Quantitative and Qualitative Disclosure about Market Risk........   52
  Item 4. Controls and Procedures..........................................   53
PART II
OTHER INFORMATION
  Item 1. Legal Proceedings................................................   54
  Item 2. Changes in Securities, Use of Proceeds and Issuer Purchases of
          Equity Securities................................................   54
  Item 4. Submission of Matters to a Vote of Security Holders..............   55
  Item 6. Exhibits and Reports on Form 8-K.................................   56
  Signatures...............................................................   57




<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)                           2003            2004        CHANGE
-----------------------------------------------------------------   -----------     -----------    -------
<S>                                                                 <C>             <C>               <C>
RESULTS OF OPERATIONS:
  Net interest income(1).........................................   $   391,404     $   401,223       2.51%
  (Reversal of) provision for credit losses......................        30,000          (5,000)        nm
  Noninterest income.............................................       185,771         211,205      13.69
  Noninterest expense............................................       342,600         373,106       8.90
                                                                    -----------     -----------
  Income before income taxes(1)..................................       204,575         244,322      19.43
  Taxable-equivalent adjustment..................................           624             802      28.53
  Income tax expense.............................................        68,434          86,033      25.72
                                                                    -----------     -----------
  Net income.....................................................   $   135,517     $   157,487      16.21%
                                                                    ===========     ===========

PER COMMON SHARE:
  Net income--basic..............................................   $      0.90     $      1.07      18.89%
  Net income--diluted............................................          0.89            1.05      17.98
  Dividends(2)...................................................          0.28            0.31      10.71
  Book value (end of period).....................................         25.35           27.12       6.98
  Common shares outstanding (end of period)(3)...................   150,217,620     147,474,843      (1.83)
  Weighted average common shares outstanding--basic(3)...........   150,616,367     147,400,298      (2.14)
  Weighted average common shares outstanding--diluted(3).........   152,012,570     149,952,021      (1.36)
BALANCE SHEET (END OF PERIOD):
  Total assets...................................................   $40,387,343     $46,102,177      14.15%
  Total loans....................................................    26,536,272      26,036,305      (1.88)
  Nonaccrual loans...............................................       386,583         256,741     (33.59)
  Nonperforming assets...........................................       386,972         262,894     (32.06)
  Total deposits.................................................    33,252,751      39,005,555      17.30
  Medium and long-term debt......................................       418,388         836,023      99.82
  Junior subordinated debt.......................................            --          16,243         nm
  Trust preferred securities.....................................       363,050              --    (100.00)
  Stockholders' equity...........................................     3,808,025       3,999,061       5.02
BALANCE SHEET (PERIOD AVERAGE):
  Total assets...................................................   $38,348,203     $43,051,127      12.26%
  Total loans....................................................    26,723,057      26,141,856      (2.17)
  Earning assets.................................................    34,826,771      38,876,228      11.63
  Total deposits.................................................    31,078,388      35,939,525      15.64
  Stockholders' equity...........................................     3,874,293       3,949,888       1.95
FINANCIAL RATIOS:
  Return on average assets(4)....................................          1.43%           1.47%
  Return on average stockholders' equity(4)......................         14.19           16.04
  Efficiency ratio(5)............................................         59.35           60.84
  Net interest margin(1).........................................          4.53            4.14
  Dividend payout ratio..........................................         31.11           28.97
  Tangible equity ratio..........................................          9.00            7.92
  Tier 1 risk-based capital ratio................................         11.33           10.29
  Total risk-based capital ratio.................................         13.08           13.06
  Leverage ratio.................................................          9.80            8.24
  Allowance for credit losses to total loans.....................          2.21            2.00
  Allowance for credit losses to nonaccrual loans................        151.64          202.97
  Net loans charged off to average total loans(4)................          0.80            0.19
  Nonperforming assets to total loans, distressed loans held
  for sale, and foreclosed assets................................          1.46            1.01
  Nonperforming assets to total assets...........................          0.96            0.57

----------------------------
<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)  Common  shares  outstanding  reflects  common  shares  issued less treasury
     shares.

(4)  Annualized.

(5)  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 2003 and $0.5 million for the
     first three months of 2004.

nm - not meaningful

</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)                    2003          2004
-------------------------------------------------------------  --------      --------
<S>                                                            <C>           <C>
INTEREST INCOME
  Loans......................................................  $362,975      $335,329
  Securities.................................................    79,863       105,846
  Interest bearing deposits in banks.........................       962           908
  Federal funds sold and securities purchased under
    resale agreements........................................     1,677         1,959
  Trading account assets.....................................       927           557
                                                               --------      --------
  Total interest income......................................   446,404       444,599
                                                               --------      --------
INTEREST EXPENSE
  Domestic deposits..........................................    41,571        33,610
  Foreign deposits...........................................     3,206         2,132
  Federal funds purchased and securities sold under
    repurchase agreements....................................     1,327           681
  Commercial paper...........................................     2,728         1,135
  Medium and long-term debt..................................     1,866         3,139
  Preferred securities and trust notes.......................     3,671         2,181
  Other borrowed funds.......................................     1,255         1,300
                                                               --------      --------
  Total interest expense.....................................    55,624        44,178
                                                               --------      --------
NET INTEREST INCOME..........................................   390,780       400,421
  (Reversal of) provision for credit losses..................    30,000        (5,000)
                                                               --------      --------
  Net interest income after (reversal of) provision
   for credit losses.........................................   360,780       405,421
                                                               --------      --------
NONINTEREST INCOME
  Service charges on deposit accounts........................    72,287        81,096
  Trust and investment management fees.......................    32,675        35,822
  Insurance commissions......................................    13,218        21,735
  International commissions and fees.........................    15,345        17,545
  Card processing fees, net..................................     9,682         8,792
  Foreign exchange gains, net................................     6,934         8,344
  Brokerage commissions and fees.............................     8,654         8,297
  Merchant banking fees......................................     6,018         7,467
  Securities gains, net......................................        --         1,622
  Other......................................................    20,958        20,485
                                                               --------      --------
  Total noninterest income...................................   185,771       211,205
                                                               --------      --------
NONINTEREST EXPENSE
  Salaries and employee benefits.............................   198,107       219,423
  Net occupancy..............................................    27,636        31,582
  Equipment..................................................    16,671        17,271
  Communications.............................................    13,844        13,410
  Software...................................................    12,076        12,995
  Professional services......................................    12,014        11,303
  Foreclosed asset expense...................................        51           519
  Other......................................................    62,201        66,603
                                                               --------      --------
  Total noninterest expense..................................   342,600       373,106
                                                               --------      --------
  Income before income taxes.................................   203,951       243,520
  Income tax expense.........................................    68,434        86,033
                                                               --------      --------
NET INCOME...................................................  $135,517      $157,487
                                                               ========      ========
NET INCOME PER COMMON SHARE--BASIC...........................  $   0.90      $   1.07
                                                               ========      ========
NET INCOME PER COMMON SHARE--DILUTED.........................  $   0.89      $   1.05
                                                               ========      ========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING--BASIC............   150,616       147,400
                                                               ========      ========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING--DILUTED..........   152,013       149,952
                                                               ========      ========

</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)                                                          2003           2003          2004
--------------------------------------------------------------------------  -----------   ------------   -----------
<S>                                                                         <C>           <C>            <C>
ASSETS
Cash and due from banks...................................................  $ 2,480,626   $  2,494,127   $ 2,154,170
Interest bearing deposits in banks........................................      226,893        235,158       243,585
Federal funds sold and securities purchased under resale agreements.......    1,736,800        769,720     3,517,500
                                                                            -----------   ------------   -----------
  Total cash and cash equivalents.........................................    4,444,319      3,499,005     5,915,255
Trading account assets....................................................      305,102        252,929       285,305
Securities available for sale:
  Securities pledged as collateral........................................      117,092        106,560        97,040
  Held in portfolio.......................................................    6,944,188     10,660,332    11,496,366
Loans (net of allowance for credit losses: March 31, 2003, $586,197;
  December 31, 2003, $532,970; March 31, 2004, $521,111)..................   25,950,075     25,411,658    25,515,194
Due from customers on acceptances.........................................      128,401         71,078        50,554
Premises and equipment, net...............................................      504,451        509,734       523,197
Intangible assets.........................................................       37,541         49,592        61,181
Goodwill..................................................................      150,846        226,556       314,994
Other assets..............................................................    1,805,328      1,711,023     1,843,091
                                                                            -----------   ------------   -----------
  Total assets............................................................  $40,387,343   $ 42,498,467   $46,102,177
                                                                            ===========   ============   ===========
LIABILITIES
Domestic deposits:
  Noninterest bearing.....................................................  $15,727,203   $ 16,668,773   $18,736,656
  Interest bearing........................................................   15,944,421     17,146,858    18,238,967
Foreign deposits:
  Noninterest bearing.....................................................      434,258        619,249       661,004
  Interest bearing........................................................    1,146,869      1,097,403     1,368,928
                                                                            -----------   ------------   -----------
    Total deposits........................................................   33,252,751     35,532,283    39,005,555
Federal funds purchased and securities sold under repurchase agreements...      282,135        280,968       325,238
Commercial paper..........................................................      852,494        542,270       478,039
Other borrowed funds......................................................      139,821        212,088       204,681
Acceptances outstanding...................................................      128,401         71,078        50,554
Other liabilities.........................................................    1,142,278        934,916     1,186,783
Medium and long-term debt.................................................      418,388        820,488       836,023
Junior subordinated debt payable to subsidiary grantor trust..............           --        363,940        16,243
UnionBanCal Corporation--obligated mandatorily redeemable preferred
  securities of subsidiary grantor trust..................................      363,050             --            --
                                                                            -----------   ------------   -----------
  Total liabilities.......................................................   36,579,318     38,758,031    42,103,116
                                                                            -----------   ------------   -----------
Commitments and contingencies
STOCKHOLDERS' EQUITY
Preferred stock:
  Authorized 5,000,000 shares, no shares issued or outstanding as of
    March 31, 2003, December 31, 2003, and March 31, 2004.................           --             --            --
Common stock, no stated value per share at March 31, 2003, and par value
  of $1 per share at December 31, 2003 and March 31, 2004(1):
  Authorized 300,000,000 shares, issued 150,217,620 shares as of March 31,
    2003, 146,000,156 shares as of December 31, 2003, and 148,546,543
    shares as of March 31, 2004...........................................      905,668        146,000       148,547
Additional paid-in capital................................................           --        555,156       688,231
Treasury stock--242,000 shares as of December 31, 2003 and 1,071,700
  shares as of March 31, 2004.............................................           --        (12,846)      (56,932)
Retained earnings.........................................................    2,685,019      2,999,884     3,111,464
Accumulated other comprehensive income....................................      217,338         52,242       107,751
                                                                            -----------   ------------   -----------
  Total stockholders' equity..............................................    3,808,025      3,740,436     3,999,061
                                                                            -----------   ------------   -----------
  Total liabilities and stockholders' equity..............................  $40,387,343   $ 42,498,467   $46,102,177
                                                                            ===========   ============   ===========

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

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

</FN>
</TABLE>

See  accompanying  notes  to  condensed  consolidated  financial  statements.


                                       4

<PAGE>

<TABLE>
<CAPTION>

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


                                                                                               ACCUMULATED      TOTAL
                                                             ADDITIONAL                           OTHER         STOCK-
(AMOUNTS IN THOUSANDS,                NUMBER      COMMON      PAID-IN    TREASURY   RETAINED  COMPREHENSIVE     HOLDERS'
 EXCEPT SHARES)                     OF SHARES    STOCK(1)      CAPITAL     STOCK    EARNINGS      INCOME        EQUITY
---------------------------------- -----------   --------    ----------  --------  ---------- -------------   ----------
<S>              <C> <C>           <C>           <C>         <C>         <C>       <C>        <C>             <C>
BALANCE DECEMBER 31, 2002......... 150,702,363   $926,460    $       --  $     --  $2,591,635 $     240,094   $3,758,189
                                                 --------    ----------  --------  ---------- -------------   ----------
Comprehensive income
  Net income--For the three months
    ended March 31, 2003..........                                                    135,517                    135,517
  Other comprehensive income, net
    of tax:
    Net change in unrealized gains
      on cash flow hedges.........                                                                   (7,379)      (7,379)
    Net change in unrealized gains
      on securities available for
      sale........................                                                                  (14,741)     (14,741)
    Foreign currency translation
      adjustment..................                                                                     (636)        (636)
                                                                                                              ----------
Total comprehensive income........                                                                               112,761
Dividend reinvestment plan........       4,684         10                                                             10
Deferred compensation - restricted
  stock awards....................                                                         56                         56
Stock options exercised...........     177,309      5,691                                                          5,691
Common stock repurchased(2).......    (666,736)   (26,493)                                                       (26,493)
Dividends declared on common
  stock, $0.28 per share(3).......                                                    (42,189)                   (42,189)
                                                 --------    ----------  --------  ---------- -------------   ----------
Net change........................                (20,792)           --        --      93,384       (22,756)      49,836
                                   -----------   --------    ----------  --------  ---------- -------------   ----------
BALANCE MARCH 31, 2003............ 150,217,620   $905,668    $       --  $     --  $2,685,019 $     217,338   $3,808,025
                                   ===========   ========    ==========  ========  ========== =============   ==========

BALANCE DECEMBER 31, 2003......... 146,000,156   $146,000    $  555,156  $(12,846) $2,999,884 $      52,242   $3,740,436
                                                 --------    ----------  --------  ---------- -------------   ----------
Comprehensive income
  Net income--For the three months
    ended March 31, 2004..........                                                    157,487                    157,487
  Other comprehensive income, net
    of tax:
  Net change in unrealized gains
    on cash flow hedges...........                                                                   10,237       10,237
  Net change in unrealized gains
    on securities available for
    sale..........................                                                                   44,658       44,658
  Foreign currency translation
    adjustment....................                                                                      614          614
                                                                                                              ----------
Total comprehensive income........                                                                               212,996
Dividend reinvestment plan........         144                        9                                                9
Deferred compensation - restricted
  stock awards....................                                                         64                         64
Stock options exercised...........     537,524        538        20,497                                           21,035
Stock issued in acquisitions......   2,008,719      2,009       112,569                                          114,578
Common stock repurchased(2).......                                        (44,086)                               (44,086)
Dividends declared on common
  stock, $0.31 per share(3).......                                                    (45,971)                   (45,971)
                                                 --------    ----------  --------  ---------- -------------   ----------
Net change........................                  2,547       133,066   (44,086)    111,580        55,509      258,625
                                   -----------   --------    ----------  --------  ---------- -------------   ----------
BALANCE MARCH 31, 2004............ 148,546,543   $148,547    $  688,231  $(56,932) $3,111,464 $     107,751   $3,999,061
                                   ===========   ========    ==========  ========  ========== =============   ==========
--------------------
<FN>

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

(2)  Common  stock  repurchased   includes  commission  costs.  All  repurchases
     subsequent to September 29, 2003, are reflected in Treasury Stock.

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

     See accompanying notes to condensed consolidated financial statements.

                                       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)                                                            2003           2004
----------------------------------------------------------------------------   ----------     ----------
<S>                                                                            <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income................................................................   $  135,517       $157,487
  Adjustments to reconcile net income to net cash provided by (used in)
    operating activities:
    (Reversal of) provision for credit losses...............................       30,000         (5,000)
    Depreciation, amortization and accretion................................       26,728         32,269
    Provision for deferred income taxes.....................................       25,520         29,638
    Gains on securities available for sale..................................           --         (1,622)
    Net increase in prepaid expenses........................................      (90,504)       (79,954)
    Net increase in fees and other charges receivable.......................      (60,338)       (61,338)
    Net increase (decrease) in accrued expenses and other liabilities.......       35,030        161,109
    Net increase in trading account assets..................................      (29,081)       (32,376)
    Loans originated for resale.............................................      (49,720)       (93,286)
    Net proceeds from sale of loans originated for resale...................      104,082         72,471
    Other, net of acquisitions..............................................      (64,062)       206,249
                                                                               ----------     ----------
    Total adjustments.......................................................      (72,345)       228,160
                                                                               ----------     ----------
  Net cash provided by operating activities.................................       63,172        385,647
                                                                               ----------     ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Proceeds from sales of securities available for sale......................           --          9,751
  Proceeds from matured and called securities available for sale............      629,435        833,531
  Purchases of securities available for sale................................     (450,640)    (1,558,943)
  Net decrease in loans, net of acquisitions................................       89,967        340,447
  Net cash used in acquisitions.............................................           --         (2,287)
  Other, net................................................................      (20,664)       (35,540)
                                                                               ----------     ----------
  Net cash provided by (used in) investing activities.......................      248,098       (413,041)
                                                                               ----------     ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Net increase in deposits, net of acquisitions.............................      411,936      2,892,915
  Net increase (decrease) in federal funds purchased and securities
    sold under repurchase agreements........................................      (52,244)        44,270
  Net decrease in commercial paper and other borrowed funds.................     (313,714)       (71,638)
  Repayment of junior subordinated debt.....................................           --       (360,825)
  Common stock repurchased..................................................      (26,493)       (44,086)
  Payments of cash dividends................................................      (42,438)       (45,158)
  Other, net................................................................        5,065         21,658
                                                                               ----------     ----------
  Net cash provided by (used in) financing activities.......................      (17,888)     2,437,136
                                                                               ----------     ----------
Net increase in cash and cash equivalents...................................      293,382      2,409,742
Cash and cash equivalents at beginning of period............................    4,152,122      3,499,005
Effect of exchange rate changes on cash and cash equivalents................       (1,185)         6,508
                                                                               ----------     ----------
Cash and cash equivalents at end of period..................................   $4,444,319     $5,915,255
                                                                               ==========     ==========

CASH PAID DURING THE PERIOD FOR:
  Interest..................................................................   $   50,419     $   26,465
  Income taxes..............................................................        9,905         17,753
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
  Acquisition of Business Bancorp:
    Fair value of assets acquired...........................................   $       --     $  803,713
    Purchase price:
      Cash..................................................................           --        (21,772)
      Stock issued..........................................................           --       (114,578)
                                                                               ----------     ----------
    Liabilities assumed.....................................................   $       --     $  667,363
                                                                               ==========     ==========

</TABLE>


     See accompanying notes to condensed consolidated financial statements.

                                       6
<PAGE>


                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


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 (U.S.
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 U.S.  GAAP.  The
results of  operations  for the period ended March 31, 2004 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, 2003.  The  preparation of
financial  statements in conformity  with U.S. 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, 2004, the Company has announced open
market stock repurchase plans totaling $500 million and as of March 31, 2004 has
repurchased  $442  million of common  stock under these  repurchase  plans.  The
Company  repurchased $58 million and $44 million of common stock in 2003 and the
first three months of 2004, respectively,  as part of these repurchase plans. As
of March 31, 2004,  $58 million of the Company's  common stock is authorized for
repurchase.  Under separate stock repurchase  agreements,  the Company purchased
$600 million of its common  stock,  $300 million in August 2002 and $300 million
in September 2003, from its majority owner, The Bank of  Tokyo-Mitsubishi,  Ltd.
(BTM),  which is a wholly-owned  subsidiary of Mitsubishi Tokyo Financial Group,
Inc. At March 31,  2004,  BTM owned  approximately  62 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) No. 25,
"Accounting  for Stock Issued to Employees" and related  Interpretations.  Under
the intrinsic


                                       7

<PAGE>

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


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

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, 2004, 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,
2003. The value of the  restricted  stock awards issued under the plans has been
reflected  in  compensation  expense.  Options  granted  under  the plans had an
exercise price equal to the market value of the  underlying  common stock on the
date of grant and,  therefore,  were not  included  in  compensation  expense as
allowed by current U.S. GAAP.

     The following  table  illustrates the effect on net income and earnings per
share if the Company had applied the fair value  recognition  provisions of SFAS
No. 123 to stock-based employee compensation.

<TABLE>
<CAPTION>


                                                                   FOR THE THREE MONTHS
                                                                      ENDED MARCH 31,
                                                                  ----------------------
(DOLLARS IN THOUSANDS)                                              2003          2004
----------------------------------------------------------------  --------      --------
<S>                                                               <C>           <C>
AS REPORTED NET INCOME..........................................  $135,517      $157,487
Stock option-based employee compensation expense (determined
  under fair value based method for all awards, net of taxes)...    (5,956)       (6,532)
                                                                  --------      --------
Pro forma net income, after stock option-based employee
  compensation expense..........................................  $129,561      $150,955
                                                                  ========      ========
EARNINGS PER SHARE--BASIC
As reported.....................................................  $   0.90      $   1.07
Pro forma.......................................................  $   0.86      $   1.02
EARNINGS PER SHARE--DILUTED
As reported.....................................................  $   0.89      $   1.05
Pro forma.......................................................  $   0.85      $   1.01

</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 2003 and 2004 was not significant.

NOTE 2--RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

     ACCOUNTING FOR ASSET RETIREMENT OBLIGATIONS

     In June  2001,  the  FASB  issued  SFAS  No.  143,  "Accounting  for  Asset
Retirement  Obligations." This Statement addresses the financial  accounting and
reporting for obligations  associated with the retirement of tangible long-lived
assets and the  associated  asset  retirement  costs.  It  requires an entity to
record a liability for an obligation  associated with the retirement of an asset
at the time the  liability is incurred by  capitalizing  the cost as part of the
carrying  value of the  related  asset and  depreciating  it over the  remaining
useful  life of the asset.  This  Statement  was  effective  for the  Company on
January 1, 2003 and did not have a material  impact on the  Company's  financial
position or results of operations.



                                       8

<PAGE>

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

NOTE 2--RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (CONTINUED)

     ACCOUNTING FOR COSTS ASSOCIATED WITH EXIT OR DISPOSAL ACTIVITIES

     In June  2002,  the  FASB  issued  SFAS  No.  146,  "Accounting  for  Costs
Associated  with Exit or  Disposal  Activities."  This  Statement  replaces  the
accounting and reporting  provisions of Emerging  Issues Task Force (EITF) Issue
No. 94-3,  "Liability  Recognition for Certain Employee Termination Benefits and
Other  Costs  to  Exit  an  Activity  (including  Certain  Costs  Incurred  in a
Restructuring)."  It  requires  that costs  associated  with an exit or disposal
activity be recognized  when a liability is incurred  rather than at the date an
entity commits to an exit plan.  This Statement was effective on January 1, 2003
and did not have a  material  impact  on the  Company's  financial  position  or
results of operations.

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

     In  November  2002,  the  FASB  issued  Interpretation  No.  45  (FIN  45),
"Guarantor's  Accounting and Disclosure  Requirements for Guarantees,  Including
Indirect Guarantees of Indebtedness of Others." The Interpretation elaborates on
the existing  disclosure  requirements  for most  guarantees  and requires  that
guarantors  recognize a liability  for the fair value of certain  guarantees  at
inception. The disclosure requirements of this Interpretation were effective for
financial statements ending after December 15, 2002. The initial recognition and
measurement  provisions  of this  Interpretation  were applied on a  prospective
basis to guarantees  issued or modified after December 31, 2002. The adoption of
this  Interpretation  did not have a material impact on the Company's  financial
position or results of operations.

     ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

     In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on
Derivative  Instruments  and  Hedging  Activities."  This  Statement  amends and
clarifies  financial  accounting  and  reporting  for  derivative   instruments,
including  certain  derivative  instruments  embedded in other contracts and for
hedging  activities under SFAS No. 133,  "Accounting for Derivative  Instruments
and Hedging  Activities."  SFAS No. 149 was effective for contracts entered into
or modified after June 30, 2003 and for hedging  relationships  designated after
June 30, 2003.  The provisions of the Statement,  with certain  exceptions,  are
required to be applied  prospectively.  The adoption of this  Statement  did not
have a  material  impact on the  Company's  financial  position  or  results  of
operations.

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

     In May  2003,  the  FASB  issued  SFAS No.  150,  "Accounting  for  Certain
Financial  Instruments with Characteristics of both Liabilities and Equity." The
Statement  establishes standards for how the Company should classify and measure
certain  financial  instruments  with  characteristics  of both  liabilities and
equity.  This Statement was effective for financial  instruments entered into or
modified after May 31, 2003, and to other instruments effective at the beginning
of the first  interim  period  beginning  after June 15, 2003.  Adoption of this
Statement did not have a material impact on the Company's  financial position or
results of operations.

     CONSOLIDATION OF VARIABLE INTEREST ENTITIES

     In  January  2003,  the  FASB  issued   Interpretation  No.  46  (FIN  46),
"Consolidation of Variable Interest  Entities".  FIN 46 provides guidance on how
to identify a variable interest entity (VIE), and when the


                                       9

<PAGE>

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

NOTE 2--RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (CONTINUED)

assets, liabilities,  noncontrolling interests and result of operations of a VIE
need to be included in a company's consolidated financial statements. A variable
interest  entity  exists when either the total equity  investment at risk is not
sufficient  to permit the entity to finance  its  activities  by itself,  or the
equity  investors  lack a  controlling  financial  interest  or they have voting
rights that are not  proportionate  to their economic  interest.  A company that
holds variable  interests in an entity will need to  consolidate  that entity if
the  company's  interest  in the VIE is such  that  the  company  will  absorb a
majority of the VIE's  expected  losses  and/or  receive a majority of the VIE's
expected  residual  returns,  if they  occur.  FIN 46 also  requires  additional
disclosures by primary  beneficiaries  and other  significant  variable interest
holders.

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

     ACCOUNTING   FOR   EMPLOYERS'   DISCLOSURES   ABOUT   PENSIONS   AND  OTHER
     POSTRETIREMENT BENEFITS

     In December  2003,  the FASB issued SFAS No.  132R,  a revision of SFAS No.
132, "Employers'  Disclosures about Pensions and Other Postretirement  Benefits,
an amendment of FASB Statements No. 87, 88, and 106." The Statement  expands the
disclosure  requirements of SFAS No. 132 to include information describing types
of plan assets, investment strategy, measurement date(s), plan obligations, cash
flows,  and components of net period benefit costs of defined  pension plans and
other  defined  benefit  postretirement  plans.  The  Statement is effective for
financial  statements  with fiscal  years ending  after  December 15, 2003.  The
expanded  disclosures  required by SFAS No. 132R are  disclosed in Note 7 of the
Notes to Consolidated  Financial  Statements in the Form 10-K for the year ended
December 31, 2003.  Periodic  disclosures  under SFAS No. 132R are  contained in
Note 8 of this document.

     ACCOUNTING FOR CERTAIN LOANS ACQUIRED IN A TRANSFER

     In December 2003,  under  clearance of the FASB,  the Accounting  Standards
Executive  Committee  (AcSEC) of the AICPA issued  Statement  of Position  (SOP)
03-3,  "Accounting for Certain Loans or Debt Securities Acquired in a Transfer."
This SOP establishes  accounting standards for discounts on purchased loans when
the discount is attributable  to credit quality.  The SOP requires that the loan
discount,  rather than contractual amounts,  establishes the investor's estimate
of undiscounted expected future principal and interest cash flows as a benchmark
for yield and  impairment  measurements.  The SOP  prohibits  the  carryover  or
creation of a valuation  allowance  in the initial  accounting  for these loans.
This SOP is effective  for loans  acquired in years  ending  after  December 15,
2004.  Management  believes  that  adoption  of this  Statement  will not have a
material impact on the Company's  financial position or results of operations at
adoption.




                                       10

<PAGE>

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

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, 2003 and 2004.

<TABLE>
<CAPTION>


                                                               FOR THE THREE MONTHS ENDED MARCH 31,
                                                           -----------------------------------------
                                                                  2003                  2004
                                                           -------------------   -------------------
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)                BASIC     DILUTED      BASIC    DILUTED
---------------------------------------------------------- --------   --------   --------   --------
<S>                                                        <C>        <C>        <C>        <C>
Net Income................................................ $135,517   $135,517   $157,487   $157,487
                                                           ========   ========   ========   ========
Weighted average common shares outstanding................  150,616    150,616    147,400    147,400
Additional shares due to:
Assumed conversion of dilutive stock options..............       --      1,397         --      2,552
                                                           --------   --------   --------   --------
Adjusted weighted average common shares outstanding.......  150,616    152,013    147,400    149,952
                                                           ========   ========   ========   ========
Net income per share...................................... $   0.90   $   0.89   $   1.07   $   1.05
                                                           ========   ========   ========   ========

</TABLE>























                                       11

<PAGE>


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


NOTE 4--ACCUMULATED OTHER COMPREHENSIVE INCOME

     The  following   table  presents  the  components  of  the  net  change  in
accumulated other  comprehensive  income and the related tax effect allocated to
each component.

<TABLE>
<CAPTION>


                                                                         BEFORE TAX
(DOLLARS IN THOUSANDS)                                                      AMOUNT     TAX EFFECT   NET OF TAX
----------------------------------------------------------------------   ----------    ----------   ----------
<S>                                                                      <C>           <C>          <C>
FOR THE THREE MONTHS ENDED MARCH 31, 2003:
Cash flow hedge activities:
  Unrealized net gains on hedges......................................   $      337    $     (129)  $      208
  Less:  reclassification adjustment for net gains on hedges
         included in net income.......................................      (12,286)        4,699       (7,587)
                                                                         ----------    ----------   ----------
Net change in unrealized gains on hedges..............................      (11,949)        4,570       (7,379)
                                                                         ----------    ----------   ----------
Securities available for sale:
  Unrealized holding losses arising during the period on securities
    available for sale................................................      (23,872)        9,131      (14,741)
  Less:  reclassification adjustment for net gains on securities
         available for sale included in net income....................           --            --           --
                                                                         ----------    ----------   ----------
Net change in unrealized gains on securities available for sale.......      (23,872)        9,131      (14,741)
                                                                         ----------    ----------   ----------
Foreign currency translation adjustment...............................       (1,030)          394         (636)
                                                                         ----------    ----------   ----------
Minimum pension liability adjustment..................................           --            --           --
                                                                         ----------    ----------   ----------
Net change in accumulated other comprehensive income..................   $  (36,851)   $   14,095   $  (22,756)
                                                                         ==========    ==========   ==========

FOR THE THREE MONTHS ENDED MARCH 31, 2004:
Cash flow hedge activities:
  Unrealized net gains on hedges......................................   $   40,087    $  (15,333)  $   24,754
 Less:  reclassification adjustment for net gains on hedges
        included in net income........................................      (23,509)        8,992      (14,517)
                                                                         ----------    ----------   ----------
Net change in unrealized gains on hedges..............................       16,578        (6,341)      10,237
                                                                         ----------    ----------   ----------
Securities available for sale:
  Unrealized holding gains arising during the period on securities
    available for sale................................................       73,943       (28,283)      45,660
  Less:  reclassification adjustment for net gains on securities
         available for sale included in net income....................       (1,622)          620       (1,002)
                                                                         ----------    ----------   ----------
Net change in unrealized gains on securities available for sale.......       72,321       (27,663)      44,658
                                                                         ----------    ----------   ----------
Foreign currency translation adjustment...............................          994          (380)         614
                                                                         ----------    ----------   ----------
Minimum pension liability adjustment..................................           --            --           --
                                                                         ----------    ----------   ----------
Net change in accumulated other comprehensive income..................   $   89,893    $  (34,384)  $   55,509
                                                                         ==========    ==========   ==========

</TABLE>


                                       12

<PAGE>

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


NOTE 4--ACCUMULATED OTHER COMPREHENSIVE INCOME (CONTINUED)

     The  following  table  presents   accumulated  other  comprehensive  income
balances.


<TABLE>
<CAPTION>


                                        NET            NET
                                    UNREALIZED      UNREALIZED
                                  GAINS (LOSSES)  GAINS (LOSSES)      FOREIGN      MINIMUM     ACCUMULATED
                                     ON CASH       ON SECURITES       CURRENCY     PENSION        OTHER
                                       FLOW          AVAILABLE      TRANSLATION   LIABILITY   COMPREHENSIVE
(DOLLARS IN THOUSANDS)                HEDGES         FOR SALE       ADJUSTMENT    ADJUSTMENT   INCOME (LOSS)
-------------------------------   --------------  --------------    -----------   ----------  -------------
<S>               <C> <C>         <C>             <C>               <C>           <C>         <C>
BALANCE, DECEMBER 31, 2002.....   $      104,368  $      147,450    $   (10,649)  $   (1,075) $     240,094
Change during the period.......           (7,379)        (14,741)          (636)          --        (22,756)
                                  --------------  --------------    -----------   ----------  -------------
BALANCE, MARCH 31, 2003........   $       96,989  $      132,709    $   (11,285)  $   (1,075) $     217,338
                                  ==============  ==============    ===========   ==========  =============

BALANCE, DECEMBER 31, 2003.....   $       43,786  $       22,535    $   (10,293)  $   (3,786) $      52,242
Change during the period.......           10,237          44,658            614           --         55,509
                                  --------------  --------------    -----------   ----------  -------------
BALANCE, MARCH 31, 2004........   $       54,023  $       67,193    $    (9,679)  $   (3,786) $     107,751
                                  ==============  ==============    ===========   ==========  =============

</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,  deposit  services and cash management as
          well as fiduciary,  private  banking,  investment and asset management
          services for  individuals  and  institutions,  and risk management and
          insurance products for businesses and individuals.

     o    The  Commercial  Financial  Services  Group  provides  credit and cash
          management  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,  customized cash management  services and selected  capital
          markets products.

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

     o    The Global  Markets  Group  manages the  Company's  wholesale  funding
          needs,  securities  portfolio,  and interest rate and liquidity risks.
          The group also  offers a broad  range of risk  management  and trading
          products to institutional  and business clients of the Company through
          the businesses described above.

     The  information,  set forth in the table 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 U.S. GAAP.  Consequently,  reported results
are not necessarily comparable with those presented by other companies. Included
in the total  asset  line of the  table are the  amounts  of  goodwill  for each
reporting unit


                                       13

<PAGE>

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


NOTE 5--BUSINESS SEGMENTS (CONTINUED)

as of March 31, 2003 and 2004.  Substantially  all of the goodwill  reflected on
the Condensed  Consolidated Balance Sheet is attributed to the Community Banking
and Investment Services Group.

     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" is comprised of certain parent company non-bank  subsidiaries,  the
elimination  of the fully  taxable-equivalent  basis  amount,  the amount of the
(reversal of) provision for credit losses  over/(under)  the RAROC expected loss
for the period, the earnings  associated with the unallocated equity capital and
allowance  for credit  losses,  and the  residual  costs of support  groups.  In
addition,  it includes the Pacific Rim Corporate  Group,  which offers financial
products to  Japanese-owned  subsidiaries  located in the U.S. On an  individual
basis, none of the items in "Other" are significant to the Company's business.















                                       14

<PAGE>


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


NOTE 5--BUSINESS SEGMENTS (CONTINUED)


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

<TABLE>
<CAPTION>


                                                        COMMUNITY BANKING         COMMERCIAL
                                                          AND INVESTMENT      FINANCIAL SERVICES      INTERNATIONAL
                                                             SERVICES                GROUP            BANKING GROUP
                                                       -------------------    -------------------    ---------------
                                                               AS OF AND FOR THE THREE MONTHS ENDED MARCH 31,
                                                       -------------------------------------------------------------
                                                         2003       2004        2003       2004       2003     2004
-----------------------------------------------------  --------   --------    --------   --------    ------   ------
<S>                                                    <C>        <C>         <C>        <C>         <C>     <C>
RESULTS OF OPERATIONS (DOLLARS IN THOUSANDS):
Net interest income..................................  $167,861   $182,667    $179,232   $183,506    $8,958  $ 7,808
Noninterest income...................................   101,627    116,600      57,912     69,627    15,483   18,189
                                                       --------   --------    --------   --------    ------  -------
Total revenue........................................   269,488    299,267     237,144    253,133    24,441   25,997
Noninterest expense..................................   199,891    218,984      98,759    104,643    14,935   15,683
Credit expense (income)..............................     7,718      7,787      42,462     31,226       505      604
                                                       --------   --------    --------   --------    ------  -------
Income (loss) before income tax expense (benefit)....    61,879     72,496      95,923    117,264     9,001    9,710
Income tax expense (benefit).........................    23,668     27,730      30,680     38,249     3,443    3,714
                                                       --------   --------    --------   --------    ------  -------
Net income (loss)....................................  $ 38,211   $ 44,766    $ 65,243   $ 79,015    $5,558  $ 5,996
                                                       ========   ========    ========   ========    ======  =======
TOTAL ASSETS (dollars in millions):..................  $ 12,133   $ 13,414    $ 15,491   $ 14,330    $2,146  $ 2,134
                                                       ========   ========    ========   ========    ======  =======

</TABLE>

<TABLE>
<CAPTION>

                                                              GLOBAL                                      UNIONBANCAL
                                                          MARKETS GROUP              OTHER                CORPORATION
                                                       -------------------    -------------------    ------------------
                                                                 AS OF AND FOR THE THREE MONTHS ENDED MARCH 31,
                                                       ----------------------------------------------------------------
                                                         2003       2004        2003       2004        2003      2004
-----------------------------------------------------  --------   --------    --------   --------    --------  --------
<S>                                                    <C>        <C>         <C>        <C>         <C>       <C>
RESULTS OF OPERATIONS (DOLLARS IN THOUSANDS):
Net interest income..................................  $ 21,092   $  1,151    $ 13,637   $ 25,289    $390,780  $400,421
Noninterest income...................................     1,526      1,541       9,223      5,248     185,771   211,205
                                                       --------   --------    --------   --------    --------  --------
Total revenue........................................    22,618      2,692      22,860     30,537     576,551   611,626
Noninterest expense..................................     4,487      6,427      24,528     27,369     342,600   373,106
Credit expense (income)..............................        50         50     (20,735)   (44,667)     30,000    (5,000)
                                                       --------   --------    --------   --------    --------  --------
Income (loss) before income tax expense (benefit)....    18,081     (3,785)     19,067     47,835     203,951   243,520
Income tax expense (benefit).........................     6,916     (1,448)      3,727     17,788      68,434    86,033
                                                       --------   --------    --------   --------    --------  --------
Net income (loss)....................................  $ 11,165   $ (2,337)   $ 15,340   $ 30,047    $135,517  $157,487
                                                       ========   ========    ========   ========    ========  ========
TOTAL ASSETS (dollars in millions):..................  $  9,359   $ 15,461    $  1,258   $    763    $ 40,387  $ 46,102
                                                       ========   ========    ========   ========    ========  ========

</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 notes, medium-term
notes and subordinated debt.




                                       15

<PAGE>


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


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., U.S. dollar LIBOR. In these  strategies,  the
hedging instruments are matched with groups of variable rate loans such that the
tenor  of the  variable  rate  loans  and  that  of the  hedging  instrument  is
identical.  Cash flow hedging  strategies  include the  utilization of purchased
floor,  cap,  corridor  options and interest rate swaps.  At March 31, 2004, the
weighted average  remaining life of these cash flow hedges is approximately  1.5
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 floor strike rate
while net payments to be paid will reduce the increase in loan  interest  income
caused by the LIBOR index rising above the collar's cap strike rate.

     The  Company  uses  interest  rate swaps to hedge the  variable  cash flows
associated  with 1-month 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 CDs' original term
to  maturity,  which  reflects  their  repricing  frequency.  Net payments to be
received under the cap contract  offset the increase in interest  expense caused
by the relevant LIBOR index rising above the cap's strike rate.

     The Company uses  interest  rate cap  corridors to hedge the variable  cash
flows associated with the forecasted issuance and roll-over of short-term, fixed
rate,  negotiable  CDs. In these hedging  relationships,  the Company hedges the
LIBOR component of the CD rates, either 1-month LIBOR, 3-month LIBOR, or 6-month
LIBOR,  based on the original term to maturity of the CDs,  which reflects their
repricing  frequency.  Net  payments  to be  received  under  the  cap  corridor
contracts offset the increase in deposit interest expense caused by the relevant
LIBOR index rising  above the  corridor's  lower  strike  rate,  but only


                                       16

<PAGE>

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


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

to the extent the index rises to the upper  strike rate.  The corridor  will not
provide  protection  from increases in the relevant LIBOR index to the extent it
rises above the corridor's upper strike rate.

     Hedging  transactions  are  structured  at  inception  so that the notional
amounts of the hedge are matched with an equal principal amount of loans or CDs,
the index and repricing  frequencies  of the hedge matches those of the loans or
CDs, and the period in which the designated hedged cash flows occurs is equal to
the term of the  hedge.  As such,  most of the  ineffectiveness  in the  hedging
relationship  results from the mismatch between the timing of reset dates on the
hedge  versus  those of the loans or CDs.  In the  first  quarter  of 2004,  the
Company  recorded a net loss of $1.5  million due to  ineffectiveness,  which is
recognized in noninterest expense, compared to a net gain of $0.1 million in the
first quarter of 2003.

     FAIR VALUE HEDGES

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

     The  Company  engaged in an  interest  rate  hedging  strategy  in which an
interest rate swap was associated with a specific  interest  bearing  liability,
UnionBanCal  Corporation's Trust Notes, in order to convert the liability from a
fixed rate to a floating rate instrument. This strategy mitigated the changes in
fair value of the hedged liability caused by changes in the designated benchmark
interest rate, U.S. dollar LIBOR.

     Fair value hedging  transactions  were  structured at inception so that the
notional amounts of the swap matched an associated principal amount of the Trust
Notes.  The interest  payment dates,  the expiration date, and the embedded call
option of the swap matched those of the Trust Notes. The  ineffectiveness on the
fair  value  hedges  during  the  first  quarter  of 2004 was a net gain of $1.6
million,  realized  upon the  termination  of the  swap on  February  19,  2004,
compared to a net gain of $0.1 million in the first quarter of 2003.

     HEDGING STRATEGY FOR MEDIUM-TERM NOTES

     The  Company  engages in an  interest  rate  hedging  strategy  in which an
interest rate swap is associated with a specified  interest  bearing  liability,
UnionBanCal  Corporation's  five-year,  medium-term  debt issuance,  in order to
convert the  liability  from a fixed rate to a floating  rate  instrument.  This
strategy  mitigates the changes in fair value of the hedged  liability caused by
changes in the designated benchmark interest rate, U.S. dollar LIBOR.

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

     HEDGING STRATEGY FOR SUBORDINATED DEBT

     The  Company  engages in an  interest  rate  hedging  strategy  in which an
interest rate swap is associated with a specified  interest  bearing  liability,
UnionBanCal  Corporation's  ten-year,  subordinated  debt issuance,  in order to
convert the  liability  from a fixed rate to a floating  rate  instrument.  This
strategy  mitigates the changes in fair value of the hedged  liability caused by
changes in the designated benchmark interest rate, U.S. dollar LIBOR.




                                       17

<PAGE>


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


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

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

     OTHER

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

NOTE 7--GUARANTEES

     Standby and commercial letters of credit are conditional commitments issued
to guarantee the performance of a customer to a third party.  Standby letters of
credit  generally  are  contingent  upon the failure of the  customer to perform
according to the terms of the  underlying  contract with the third party,  while
commercial  letters of credit are issued  specifically to facilitate  foreign or
domestic trade  transactions.  The majority of these types of  commitments  have
terms of one year or less.  Collateral  may be  obtained  based on  management's
credit  assessment of the customer.  As of March 31, 2004, the Company's maximum
exposure to loss for standby and  commercial  letters of credit is $2.8  billion
and $223.1 million,  respectively.  At March 31, 2004, the carrying value of the
Company's standby and commercial  letters of credit,  which is included in other
liabilities on the consolidated balance sheet, total $4.8 million.

     Principal  investments  include  direct  investments  in private and public
companies and indirect  investments in private equity funds.  The Company issues
commitments  to provide  equity and mezzanine  capital  financing to private and
public  companies  through either direct  investments  in specific  companies or
through   investment  funds  and   partnerships.   The  timing  of  future  cash
requirements to fund such  commitments is generally  dependent on the investment
cycle. This cycle, the period over which privately-held  companies are funded by
private equity investors and ultimately sold, merged, or taken public through an
initial  offering,  can vary based on overall  market  conditions as well as the
nature and type of industry in which the companies  operate.  At March 31, 2004,
the Company had commitments to fund principal investments of $52.8 million.

     The  Company  has  contingent   consideration   agreements  that  guarantee
additional  payments to acquired insurance  agencies'  stockholders based on the
agencies'  future  performance in excess of established  revenue and/or earnings
before interest,  taxes,  depreciation and amortization (EBITDA) thresholds.  If
the insurance  agencies' future  performance  exceeds these thresholds  during a
three-year  period,  the Company will be liable to make payments to those former
stockholders.  As of March 31, 2004, the Company has a maximum  exposure of $8.1
million for these agreements, the last of which expire in December 2006.

     The  Company is fund  manager for limited  liability  corporations  issuing
low-income  housing  credit (LIHC)  investments.  LIHC  investments  provide tax
benefits to investors in the form of tax deductions  from  operating  losses and
tax  credits.  To  facilitate  the sale of these LIHC  investments,  the Company
guarantees  the timely  completion  of projects  and  delivery  of tax  benefits
throughout the investment term. Guarantees may include a minimum rate of return,
the  availability  of tax  credits,  and  operating  deficit  thresholds  over a
ten-year average period.  Additionally,  the Company receives project completion
and tax credit  guarantees from the limited liability  corporations  issuing the
LIHC  investments  that reduce the


                                       18

<PAGE>


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

NOTE 7--GUARANTEES (CONTINUED)

Company's ultimate exposure to loss. As of March 31, 2004, the Company's maximum
exposure  to loss under  these  guarantees  is  limited to a return of  investor
capital and minimum investment yield, or $111.0 million. The Company maintains a
reserve of $4.0 million for these guarantees.

     The Company has  guarantees  that obligate it to perform if its  affiliates
are unable to discharge their obligations.  These obligations  include guarantee
of trust preferred securities,  commercial paper obligations and leveraged lease
transactions.  Guarantees issued by the Bank for an affiliate's commercial paper
program are done in order to facilitate  their sale.  As of March 31, 2004,  the
Bank had a maximum  exposure  to loss  under  these  guarantees,  which  have an
average term of less than one year, of $478.2 million.  The Bank's  guarantee is
fully collateralized by a pledged deposit.  UnionBanCal  Corporation  guarantees
its subsidiaries' leveraged lease transactions, which have terms ranging from 15
to 30 years. Following the original funding of the leveraged lease transactions,
UnionBanCal  Corporation has no material obligation to be satisfied. As of March
31,  2004,  UnionBanCal   Corporation  had  no  material  exposure  under  these
guarantees.

     The Company conducts  securities  lending  transactions  for  institutional
customers  as  a  fully   disclosed   agent.   At  times,   securities   lending
indemnifications  are issued to guarantee that a security  lending customer will
be made whole in the event the borrower does not return the security  subject to
the lending  agreement and collateral  held is  insufficient to cover the market
value of the security. All lending transactions are collateralized, primarily by
cash. The amount of securities  lent with  indemnifications  was $1.4 billion at
March 31, 2004. The market value of the  associated  collateral was $1.3 billion
at March 31, 2004.

NOTE 8--PENSION AND OTHER POSTRETIREMENT BENEFITS

     The following  table  summarizes  the  components  of net periodic  benefit
costs.


<TABLE>
<CAPTION>

                                                 PENSION BENEFITS        OTHER BENEFITS
                                               -------------------     -----------------
                                                  FOR THE THREE          FOR THE THREE
                                                   MONTHS ENDED           MONTHS ENDED
                                               -------------------     -----------------
(DOLLARS IN THOUSANDS)                           2003        2004       2003       2004
--------------------------------------------   -------     -------     ------     ------
<S>                                            <C>         <C>         <C>        <C>
COMPONENTS OF NET PERIODIC BENEFIT COST
Service cost................................   $ 8,217     $ 9,318     $1,295     $1,568
Interest cost...............................    11,875      12,602      2,641      2,772
Expected return on plan assets..............   (18,203)    (20,787)    (1,687)    (2,097)
Amortization of prior service cost..........       267         267        (24)       (24)
Amortization of transition amount...........        --          --        637        637
Recognized net actuarial loss...............     1,042       2,822      1,599      1,586
                                               -------     -------     ------     ------
Total net periodic benefit cost.............   $ 3,198     $ 4,222     $4,461     $4,442
                                               =======     =======     ======     ======

</TABLE>






                                       19

<PAGE>

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


NOTE 9--SUBSEQUENT EVENTS

     On April 27, 2004,  the Company  announced that the Bank has agreed to sell
its merchant card portfolio and to form a long-term marketing alliance with NOVA
Information  Systems (NOVA).  The transaction is subject to regulatory  approval
and is expected to close late in the second quarter 2004.  NOVA will acquire the
Bank's merchant accounts and will provide processing services,  customer service
and  support  operations  to the  Bank's  10,000  merchant  locations.  Merchant
services will be marketed  through on the Bank's branch  network in  California,
Oregon and  Washington.  The Company  expects to record an after-tax gain on the
transaction  of  approximately  $56  million,  with a portion  of the gain being
recorded at  closing,  and the  remainder  being  recorded  over the term of the
marketing agreement.

     On April 28,  2004,  the  Board of  Directors  declared  a  quarterly  cash
dividend of $0.36 per share of common  stock.  The dividend will be paid on July
2, 2004 to stockholders of record as of June 4, 2004.

     On April 28, 2004,  the Board of Directors  authorized the repurchase of up
to an additional $200 million of the Company's common stock.


















                                       20

<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  STOCKHOLDERS  AND WHEN WE ARE  SPEAKING ON BEHALF OF
UNIONBANCAL  CORPORATION.  FORWARD-LOOKING  STATEMENTS  CAN BE IDENTIFIED BY THE
FACT THAT THEY DO NOT RELATE  STRICTLY TO  HISTORICAL OR CURRENT  FACTS.  OFTEN,
THEY INCLUDE THE WORDS  "BELIEVE,"  "EXPECT,"  "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 AND
FISCAL   CONDITIONS  IN  CALIFORNIA,   GLOBAL  POLITICAL  AND  GENERAL  ECONOMIC
CONDITIONS  RELATED  TO  THE  WAR  ON  TERRORISM,  ADVERSE  ECONOMIC  CONDITIONS
AFFECTING  CERTAIN  INDUSTRIES,  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.  (MTFG),
COMPETITION  IN THE  BANKING  INDUSTRY,  STATUTORY  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
"MANAGEMENT'S  DISCUSSION  AND  ANALYSIS OF FINANCIAL  CONDITION  AND RESULTS OF
OPERATION."

     ALL REPORTS  THAT WE FILE  ELECTRONICALLY  WITH THE SEC,  INCLUDING  ANNUAL
REPORTS 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 AS SOON AS REASONABLY  PRACTICABLE AFTER
WE  ELECTRONICALLY  FILE SUCH REPORTS WITH,  OR FURNISH THEM, TO THE SEC.  THESE
FILINGS ARE ALSO ACCESSIBLE ON THE SEC'S WEBSITE AT WWW.SEC.GOV.

INTRODUCTION

     We  are  a   California-based,   commercial   bank  holding   company  with
consolidated assets of $46.1 billion at March 31, 2004. During 2003, UnionBanCal
Corporation changed its state of incorporation from California to Delaware.

     UnionBanCal   Corporation  and  its  banking  subsidiary,   Union  Bank  of
California,  N.A. (the Bank),  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.  At March
31,  2004,  BTM,  our  majority  owner,  owned  approximately  62 percent of our
outstanding common stock.

EXECUTIVE OVERVIEW

     We are  providing  you with an  overview  of what we  believe  are the most
significant  events that impacted our results for the first quarter of 2004. You
should  carefully  read the rest of this document for more detailed  information
that will assist your  understanding of trends,  events and  uncertainties  that
impact us.

     Our largest subsidiary is Union Bank of California, N.A., a commercial bank
that  derives  most of its  revenues  from  lending,  deposit  taking  and trust
services to customers primarily in California.  We also



                                       21

<PAGE>


service customers in the western United States,  nationally and internationally.
Interest  rates,  business  conditions  and customer  confidence  all affect our
ability to generate  revenues.  In  addition,  the  regulatory  environment  and
competition can challenge our ability to generate those revenues.

     Overall credit quality in the commercial  lending area continued to improve
in the first quarter of 2004.  The  improvements  came from  positive  financial
results and outlooks of our borrowers,  payoffs,  and a slow down in net inflows
of nonaccrual loans. As a result, we recorded a reversal of provision for credit
losses of $5.0 million and reduced our allowance for credit losses. We expect to
see continued  improvement in our credit quality throughout 2004,  assuming that
the economy's recent positive momentum continues.

     However, a full economic turnaround  continues to remain uncertain in 2004,
causing our commercial  lending  activities to be sluggish with  commercial loan
balances  significantly below the first quarter of 2003 level and slightly below
the December  31, 2003 level.  In the first  quarter of 2004,  we have seen some
improvement in the economic outlook in our markets and we anticipate that as the
economy improves, commercial lending will increase during 2004.

     Record low levels of interest rates  continued to pressure our net interest
income,  as our  variable  rate loans  repriced  more  quickly than our interest
bearing  deposits.  A  significant  contributor  to the reduced asset yields was
mortgage  refinancings  that  further  reduced  our net  interest  income on our
residential  mortgage  loans  and  our  mortgage-backed   securities  portfolio.
Derivative contracts,  used to hedge the impact of falling interest rates on our
lending  activities,  began to expire in late 2003, further  compressing our net
interest  margin in the first quarter of 2004. A discussion of the impact of our
hedges is included in our  detailed  analysis of net  interest  income.  Despite
these  pressures,  we have  benefited  from a higher  level of  earning  assets,
including a significantly  higher mix of securities,  strong deposit growth, and
changes in our  capital  structure,  including  replacing  higher cost debt with
lower cost funding.  We expect that as business  activity  picks up and interest
rates rise, our interest income will rise as well.

     Growth in core  deposits was  particularly  strong in the first  quarter of
2004,  compared to the first  quarter of 2003,  providing  us with a low cost of
funding, which is a competitive advantage. Average demand deposits for the first
quarter of 2004 were 47 percent of average total  deposits,  contributing  to an
average  annualized  all-in  cost of funds  (interest  expense  divided by total
interest bearing  liabilities and noninterest  bearing deposits) of 0.47 percent
for the first  quarter of 2004  compared to 0.67 percent in the first quarter of
2003.  We attract  deposits  by offering a variety of cash  management  products
aimed at  business  clients,  including  web  cash  management,  check  imaging,
remittance and depository services and disbursements.  In addition,  we made two
bank  acquisitions and opened a number of de novo branches in 2003 and the first
quarter of 2004, which further expanded our business locations in California.

     Noninterest  income rose 14 percent in the first quarter of 2004,  compared
to the first  quarter of 2003,  primarily  as a result of  increases  in service
charges  on  deposits,  insurance  agency  commissions,   trust  and  investment
management fees and international commissions and fees. As part of our strategic
initiatives,  we focus on  identifying  opportunities  for  growing  noninterest
income.

     Although  noninterest  expense rose 9 percent in the first quarter of 2004,
compared  to the  first  quarter  of  2003,  much of that  increase  related  to
investments  that  we  made  in  bank  and  insurance  agency  acquisitions  and
technology.  We believe  that these  investments  will bring  opportunities  for
growth in our  business  by  increasing  our  customer  base and  expanding  the
services we can provide.








                                       22

<PAGE>


FINANCIAL PERFORMANCE

SUMMARY OF FINANCIAL PERFORMANCE

<TABLE>
<CAPTION>

                                                FOR THE THREE MONTHS      INCREASE (DECREASE)
                                                        ENDED              2004 VERSUS 2003
                                                --------------------      -----------------
(DOLLARS IN THOUSANDS)                            2003        2004         AMOUNT   PERCENT
----------------------------------------------- --------    --------      -------   -------
<S>                <C>                          <C>         <C>           <C>           <C>
RESULTS OF OPERATIONS
Net interest income(1)......................... $390,780    $400,421      $ 9,641       2.5%
Noninterest income
  Service charges on deposit accounts..........   72,287      81,096        8,809      12.2
  Trust and investment management fees.........   32,675      35,822        3,147       9.6
  Insurance commissions........................   13,218      21,735        8,517      64.4
  International commissions and fees...........   15,345      17,545        2,200      14.3
  Other noninterest income.....................   52,246      55,007        2,761       5.3
                                                --------    --------      -------
Total noninterest income.......................  185,771     211,205       25,434      13.7
Total revenue..................................  576,551     611,626       35,075       6.1
(Reveral of) provision for credit losses.......   30,000      (5,000)     (35,000)       nm
Noninterest expense
  Salaries and employee benefits...............  198,107     219,423       21,316      10.8
  Net occupancy................................   27,636      31,582        3,946      14.3
  Intangible asset amortization................    2,477       4,221        1,744      70.4
  Other noninterest expense....................  114,380     117,880        3,500       3.1
                                                --------    --------      -------
Total noninterest expense......................  342,600     373,106       30,506       8.9
Income before income tax.......................  203,951     243,520       39,569      19.4
Income tax.....................................   68,434      86,033       17,599      25.7
                                                --------    --------      -------
Net income..................................... $135,517    $157,487      $21,970      16.2%
                                                ========    ========      =======

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

<FN>

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

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

     THE PRIMARY CONTRIBUTORS TO OUR FINANCIAL PERFORMANCE FOR THE FIRST QUARTER
     OF 2004 COMPARED TO THE FIRST QUARTER OF 2003 ARE PRESENTED BELOW.

     o    We recorded a $5.0 million  reversal of provision for credit losses in
          the first quarter of 2004,  which  reflects  continued  improvement in
          credit quality. Reductions in criticized and classified credits in our
          commercial   loan  portfolio   resulted  from  pay-offs,   loan  grade
          improvements,  and loan sales, and allowed us to lower our reserve for
          credit  losses.  (See  our  discussion  under  "Allowance  for  Credit
          Losses.")

     o    Although net interest  income  continues to be negatively  impacted by
          the lower  interest  rate  environment  and a decline  in the  average
          balances of our commercial  loan  portfolio,  net interest  income was
          favorably influenced by higher other earning asset volumes,  including
          a  significantly  higher mix of  securities.  Strong  deposit  growth,
          including an attractive mix of average noninterest bearing deposits to
          total deposits, also contributed favorably to our net interest income.
          (See our discussion under "Net Interest Income.")

     o    Our noninterest income was impacted by several factors:

          o    Service  charges on deposit  accounts  rose  primarily  from a 19
               percent  increase in average demand deposits in the first quarter
               of 2004 over the first  quarter of 2003 and higher  overdraft and
               return  fees  of  $4.7  million  primarily  associated  with  the
               overdraft program introduced in April 2003;



                                       23
<PAGE>



          o    Insurance  commissions  increased  mostly  from  the  April  2003
               acquisition  of Tanner  Insurance  Brokers and the December  2003
               acquisition of Knight Insurance Agency;

          o    Private  capital  investment  sales resulted in net gains of $5.0
               million in the first  quarter of 2004  compared  to net losses of
               $0.1 million in the first quarter of 2003 as equity market values
               rose;

          o    Trust and  investment  management  fees  increased from the first
               quarter   of  2003   primarily   due  to  higher   assets   under
               administration.  Trust  administration  fees began growing in the
               second half of 2003 as trust  assets  started to recover with the
               strengthening of the equity markets and a substantial increase in
               new sales. In the first quarter of 2004, managed assets increased
               by 9 percent and non-managed  assets increased by 19 percent from
               the first  quarter of 2003.  Total  assets  under  administration
               increased by 18 percent,  to $155.6  billion,  between  March 31,
               2003 and March 31, 2004; and

          o    International commissions and fees grew, reflecting strong growth
               in the foreign  remittances product in almost all of our markets,
               from a combination of increased pricing, product enhancements and
               higher market penetration.

     o    Contributing to our higher noninterest expense were several factors:

          o    Salaries and employee benefits increased mostly from:

               o    Acquisitions and new branch openings, which accounted for 44
                    percent  of  the   increase  in  our   salaries   and  other
                    compensation,

               o    higher  performance-related   incentive  expense  from  goal
                    achievements;

               o    annual merit increases; and

               o    increased employee benefits expense due to:

                    o    acquisitions and new branch  openings,  which accounted
                         for 49 percent of our employee benefits increase,

                    o    increasing  healthcare costs for current  employees and
                         retirees from rising  insurance  premiums and a greater
                         number of participants,

                    o    the impact of the lower  discount  rate we are using to
                         calculate our future  pension and other  postretirement
                         liabilities, and

                    o    the  impact of a higher  state  unemployment  tax rate,
                         which  rose from 2.0  percent  in the first  quarter of
                         2003 to 3.7 percent in the first quarter of 2004;

          o    Net occupancy costs increased  mostly from our  acquisitions  and
               new  branch  openings  and  capitalized   property   improvements
               recorded in December 2003;

          o    Intangible asset amortization  increased mainly due to our recent
               acquisitions; and

          o    Other noninterest expense rose as a result of losses attributable
               to operations and litigation.






                                       24
<PAGE>


NET INTEREST INCOME

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

<TABLE>
<CAPTION>


                                                         FOR THE THREE MONTHS ENDED
                               ------------------------------------------------------------------------------
                                             MARCH 31, 2003                         MARCH 31, 2004
                               --------------------------------------    ------------------------------------
                                              INTEREST       AVERAGE                    INTEREST     AVERAGE
                                 AVERAGE       INCOME/        YIELD/       AVERAGE       INCOME/      YIELD/
(DOLLARS IN THOUSANDS)           BALANCE      EXPENSE(1)    RATE(1)(2)     BALANCE      EXPENSE(1)  RATE(1)(2)
----------------------------   -----------    ---------     ---------    -----------    ---------   ---------
<S>                            <C>            <C>              <C>       <C>            <C>            <C>
ASSETS
Loans:(3)
  Domestic..................   $25,186,678    $355,073         5.70%     $24,532,402    $327,933       5.38%
  Foreign(4)................     1,536,379       8,166         2.16        1,609,454       7,678       1.92
Securities--taxable.........     7,014,825      79,179         4.52       11,396,654     104,993       3.69
Securities--tax-exempt......        41,943       1,014         9.67           65,813       1,335       8.11
Interest bearing deposits in
  banks.....................       203,432         962         1.92          207,854         908       1.76
Federal funds sold and
  securities purchased under
  resale agreements.........       536,114       1,677         1.27          786,994       1,959       1.00
Trading account assets             307,400         957         1.26          277,057         595       0.86
                               -----------    --------                   -----------    --------
  Total earning assets......    34,826,771     447,028         5.18       38,876,228     445,401       4.60
                                              --------                                  --------
Allowance for credit losses.      (603,240)                                 (534,226)
Cash and due from banks.....     2,094,976                                 2,276,055
Premises and equipment, net.       506,964                                   519,962
Other assets................     1,522,732                                 1,913,108
                               -----------                               -----------
  Total assets..............   $38,348,203                               $43,051,127
                               ===========                               ===========


LIABILITIES
Domestic deposits:
  Interest bearing..........   $ 9,365,182      18,809         0.81      $11,390,393      16,556       0.58
  Savings and consumer time.     3,819,545      12,316         1.31        4,136,695       8,719       0.85
  Large time................     2,414,309      10,446         1.75        2,432,602       8,335       1.38
Foreign deposits(4).........     1,384,177       3,206         0.94        1,227,223       2,132       0.70
                               -----------    --------                   -----------    --------
  Total interest bearing
    deposits................    16,983,213      44,777         1.07       19,186,913      35,742       0.75
                               -----------    --------                   -----------    --------
Federal funds purchased and
  securities sold under
  repurchase agreements.....       517,511       1,327         1.04          395,466         681       0.69
Commercial paper............       923,327       2,728         1.20          542,853       1,135       0.84
Other borrowed funds........       172,870       1,255         2.94          187,829       1,300       2.78
Medium and long-term debt...       399,729       1,866         1.89          806,062       3,139       1.57
Preferred securities and
  trust notes(5)............       351,654       3,671         4.13          203,022       2,181       4.30
                               -----------    --------                   -----------    --------
  Total borrowed funds......     2,365,091      10,847         1.85        2,135,232       8,436       1.59
                               -----------    --------                   -----------    --------
  Total interest bearing
    liabilities.............    19,348,304      55,624         1.16       21,322,145      44,178       0.83
                                              --------                                  --------
Noninterest bearing deposits    14,095,175                                16,752,612
Other liabilities...........     1,030,431                                 1,026,482
                               -----------                               -----------
  Total liabilities.........    34,473,910                                39,101,239
STOCKHOLDERS' EQUITY
Common equity...............     3,874,293                                 3,949,888
                               -----------                               -----------
  Total stockholders' equity     3,874,293                                 3,949,888
                               -----------                               -----------
  Total liabilities and
    stockholders' equity....   $38,348,203                               $43,051,127
                               ===========                               ===========
Net interest income/margin
  (taxable-equivalent basis)                   391,404         4.53%                     401,223       4.14%
Less: taxable-equivalent
  adjustment................                       624                                       802
                                              --------                                  --------
  Net interest income.......                  $390,780                                  $400,421
                                              ========                                  ========

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

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

(2)  Annualized

(3)  Average balances on loans outstanding include all nonperforming  loans. The
     amortized  portion of net loan  origination  fees  (costs) is  included  in
     interest income on loans, representing an adjustment to the yield.

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

(5)  Includes  interest  expense for both trust  preferred  securities and trust
     notes.
</FN>
</TABLE>


                                       25
<PAGE>


     Net interest  income in the first quarter of 2004, on a  taxable-equivalent
basis,  increased 3 percent,  from the first  quarter of 2003.  Our results were
attributable to the following factors:

     o    Average  earning  assets grew 12 percent in the first quarter of 2004,
          compared to the first quarter of 2003, to $38.9  billion.  This growth
          was attributable to a $4.4 billion, or 62 percent, increase in average
          securities,  partly offset by a $581.2 million, or 2 percent, decrease
          in  average  loans.  The  increase  in average  securities,  which was
          comprised primarily of fixed rate securities,  reflected liquidity and
          interest rate risk management  actions.  The decrease in average loans
          was  mostly due to a $1.4  billion  decrease  in  average  commercial,
          financial,  and industrial  loans,  partially offset by a $0.9 billion
          increase in average residential mortgages,  resulting from a strategic
          portfolio shift from more volatile  commercial loans, which we feel we
          have now achieved;

     o    Deposit  growth  has  contributed  significantly  to our lower cost of
          funds in the first  quarter of 2004,  compared to the first quarter of
          2003.  Average  noninterest  bearing  deposits were $2.7 billion or 19
          percent  higher in the first  quarter of 2004,  compared  to the first
          quarter of 2003.  Average business demand  deposits,  including demand
          deposits from our title and escrow clients,  increased by $2.2 billion
          in the first  quarter of 2004,  compared to the first quarter of 2003,
          with the balance of the increase  coming from consumer  demand deposit
          growth.  We  anticipate  that the growth rates in average  noninterest
          bearing  deposits will decline  during 2004 as rising  interest  rates
          will cause our customers to divert those  deposits to more  attractive
          interest  bearing  investments  and will slow the activity in mortgage
          loan refinancings, which will impact our title and escrow deposits;

     o    Yields on our earning  assets were  negatively  impacted by decreasing
          interest  rates in 2003 resulting in a lower average yield of 58 basis
          points on average  earning  assets,  which was negatively  impacted by
          lower interest rate hedge income of $9.9 million;

     o    Market  rates  on our  interest  bearing  liabilities  were  favorably
          impacted by the decreasing  interest rate  environment  resulting in a
          lower  cost of  funds  on  interest  bearing  liabilities  of 33 basis
          points,  which  included  higher  interest  rate hedge  income of $2.2
          million; and

     o    During  2003  and  continuing  into  2004,  our  strategy  was to take
          advantage  of our  higher  noninterest  bearing  deposit  balances  by
          reducing  our balances in higher  interest  rate  liabilities  such as
          large certificate of deposits,  foreign  deposits,  and other borrowed
          funds.

     As a result of these changes and a flattening yield curve  environment,  as
long-term interest rates declined, our net interest margin decreased by 39 basis
points.

     We use derivatives to hedge expected  changes in the yields on our variable
rate loans, term certificates of deposit (CDs), and long-term borrowings. During
2003, the positions  provided more income than in 2002, as rates persisted lower
and longer than had been anticipated.  During 2004, these positions will provide
less in net interest income as the positions mature and, to a lesser extent,  as
interest  rates rise.  However,  we expect the  declines  in hedge  income to be
partially  offset by either  increased  yields on the  underlying  variable rate
loans or continued  lower than  expected  funding costs on our term CDs and long
term  borrowings.  For the quarters  ended March 31, 2003 and 2004, we had gross
hedge income of $39.9 million and $32.2 million, respectively.






                                       26
<PAGE>


NONINTEREST INCOME

<TABLE>
<CAPTION>


                                                      FOR THE THREE MONTHS ENDED
                                             -------------------------------------------------
                                                                           INCREASE (DECREASE)
                                             MARCH 31,      MARCH 31,      -------------------
(DOLLARS IN THOUSANDS)                         2003            2004         AMOUNT     PERCENT
------------------------------------------   ---------      ---------      -------     -------
<S>                                          <C>            <C>            <C>           <C>
Service charges on deposit accounts.......   $  72,287      $  81,096      $ 8,809       12.19%
Trust and investment management fees......      32,675         35,822        3,147        9.63
Insurance commissions.....................      13,218         21,735        8,517       64.43
International commissions and fees........      15,345         17,545        2,200       14.34
Card processing fees, net.................       9,682          8,792         (890)      (9.19)
Foreign exchange gains, net...............       6,934          8,344        1,410       20.33
Brokerage commissions and fees............       8,654          8,297         (357)      (4.13)
Merchant banking fees.....................       6,018          7,467        1,449       24.08
Securities losses, net....................          --          1,622        1,622          nm
Other.....................................      20,958         20,485         (473)      (2.26)
                                             ---------      ---------      -------
  Total noninterest income................   $ 185,771      $ 211,205      $25,434       13.69%
                                             =========      =========      =======


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

nm--not meaningful

</FN>
</TABLE>

NONINTEREST EXPENSE

<TABLE>
<CAPTION>


                                                     FOR THE THREE MONTHS ENDED
                                            -------------------------------------------------
                                                                          INCREASE (DECREASE)
                                            MARCH 31,      MARCH 31,      -------------------
(DOLLARS IN THOUSANDS)                         2003           2004         AMOUNT     PERCENT
-----------------------------------------   ---------      ---------      -------     -------
<S>                                         <C>            <C>            <C>           <C>
Salaries and other compensation..........   $ 153,060      $ 170,430      $17,370       11.35%
Employee benefits........................      45,047         48,993        3,946        8.76
                                            ---------      ---------      -------
  Salaries and employee benefits.........     198,107        219,423       21,316       10.76
Net occupancy............................      27,636         31,582        3,946       14.28
Equipment................................      16,671         17,271          600        3.60
Communications...........................      13,844         13,410        (434)       (3.13)
Software.................................      12,076         12,995          919        7.61
Professional services....................      12,014         11,303        (711)       (5.92)
Advertising and public relations.........       9,667          8,727        (940)       (9.72)
Data processing..........................       8,484          7,625        (859)      (10.12)
Intangible asset amortization............       2,477          4,221        1,744       70.41
Foreclosed asset expense.................          51            519          468          nm
Other....................................      41,573         46,030        4,457       10.72
                                            ---------      ---------      -------
  Total noninterest expense..............   $ 342,600      $ 373,106      $30,506        8.90%
                                            =========      =========      =======

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

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

INCOME TAX EXPENSE

     Income  tax  expense  in the  first  quarter  of 2004  was  $86.0  million,
resulting in a 35 percent  effective  income tax rate compared with an effective
tax rate of 34 percent for first quarter 2003. The increase in the effective tax
rate was due to higher California state taxes.

     The State of California  requires us to file our franchise tax returns as a
member of a unitary group that includes MTFG and either all worldwide affiliates
or only U.S.  affiliates.  Since 1996,  we have  elected to file our  California
franchise tax returns on a worldwide unitary basis.


                                       27
<PAGE>


     The  inclusion of MTFG's  financial  results,  which in some years were net
losses,  has partially offset our net profits subject to California  income tax.
The inclusion of MTFG's worldwide property, payroll and sales in the calculation
of the  California  apportionment  factor has also reduced the percentage of our
income subject to California income tax. As a result, our effective tax rate for
California has been significantly  lower than the statutory rate, net of federal
benefit, of 7.05 percent.

     Changes in MTFG's  taxable  profits  affect our  California  taxes.  MTFG's
taxable  profits are impacted  most  significantly  by changes in the  worldwide
economy,  especially in Japan, and decisions that they may make about the timing
of the recognition of credit losses. When MTFG's worldwide taxable profits rise,
our  effective tax rate in  California  will rise.  We review  MTFG's  financial
information  on a  quarterly  basis in order to  determine  the rate at which to
recognize our California income taxes.  However, all of the information relevant
to determining  the effective tax rate may not be available  until after the end
of the period to which the tax  relates.  The  determination  of the  California
effective tax rate involves  management  judgment and estimates,  and can change
during the calendar year or between  calendar years,  as additional  information
becomes available. Our effective tax rate in the first quarter of 2004 is higher
partially as a result of increased  profits reported by MTFG for its most recent
reporting  period,  as  well as  projected  profit  increases  for  MTFG  due to
improving economic conditions in Japan.

LOANS

     The following table shows loans outstanding by loan type.

<TABLE>
<CAPTION>

                                                                                        PERCENT CHANGE TO
                                                                                      MARCH 31, 2004 FROM:
                                                                                    --------------------------
                                        MARCH 31,     DECEMBER 31,    MARCH 31,     MARCH 31,     DECEMBER 31,
(DOLLARS IN THOUSANDS)                    2003            2003          2004           2003           2003
-------------------------------------  -----------    ------------   -----------    ---------     ------------
<S>                                    <C>            <C>            <C>              <C>            <C>
Domestic:
  Commercial, financial and
    industrial.......................  $ 9,989,430    $  8,817,679   $ 8,717,052      (12.74)%       (1.14)%
  Construction.......................    1,222,501       1,101,166     1,058,414      (13.42)        (3.88)
  Mortgage:
    Residential......................    6,658,128       7,463,538     7,502,675       12.68          0.52
    Commercial.......................    4,189,565       4,195,178     4,348,537        3.79          3.66
                                       -----------    ------------   -----------
      Total mortgage.................   10,847,693      11,658,716    11,851,212        9.25          1.65
  Consumer:
    Installment......................      881,136         818,746       781,731      (11.28)        (4.52)
    Revolving lines of credit........    1,125,186       1,222,220     1,279,651       13.73          4.70
                                       -----------    ------------   -----------
      Total consumer.................    2,006,322       2,040,966     2,061,382        2.74          1.00
  Lease financing....................      756,673         663,632       637,504      (15.75)        (3.94)
                                       -----------    ------------   -----------
      Total loans in domestic offices   24,822,619      24,282,159    24,325,564       (2.00)         0.18
Loans originated in foreign branches.    1,705,340       1,650,204     1,707,535        0.13          3.47
                                       -----------    ------------   -----------
      Total loans held to maturity...   26,527,959      25,932,363    26,033,099       (1.87)         0.39
      Total loans held for sale......        8,313          12,265         3,206      (61.43)       (73.86)
                                       -----------    ------------   -----------
        Total loans..................  $26,536,272    $ 25,944,628   $26,036,305       (1.88)%        0.35%
                                       ===========    ============   ===========

</TABLE>




                                       28
<PAGE>


     COMMERCIAL, FINANCIAL AND INDUSTRIAL LOANS

     Commercial,  financial and  industrial  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 U.S.

     Our commercial market lending  originates  primarily through our commercial
banking offices. These offices, which rely extensively on  relationship-oriented
banking, provide a variety of services including cash management services, lines
of credit, accounts receivable and inventory financing. Separately, we originate
or  participate in a wide variety of financial  services to major  corporations.
These services include traditional  commercial banking and specialized financing
tailored to the needs of each customer's  specific industry.  Presently,  we are
active  in,  among  other  sectors,  the oil  and  gas,  communications,  media,
entertainment, retailing and financial services industries.

     The  commercial,  financial and industrial  loan  portfolio  decreased $1.3
billion,  or 13  percent,  in the first  quarter of 2004,  compared to the first
quarter of 2003,  primarily due to economic  conditions that continued to reduce
loan demand in some segments.  Loan sales and managed exits also  contributed to
the  decline,  consistent  with our  strategy to reduce our  exposure to certain
commercial  loans while  increasing our investment in more stable consumer loans
(including residential mortgages).

     CONSTRUCTION AND COMMERCIAL MORTGAGE LOANS

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

     The construction loan portfolio decrease of $164.1 million,  or 13 percent,
in the first  quarter  of 2004,  compared  to the  first  quarter  of 2003,  was
primarily  attributable  to slowing  growth in capital assets and employment and
higher office vacancy rates in our markets.  These factors impacted the level of
development and construction projects we financed.

     The commercial  mortgage loan portfolio consists of loans on commercial and
industrial  projects  primarily  in  California.   The  increase  in  commercial
mortgages  of  $159.0  million,  or 4  percent,  in the first  quarter  of 2004,
compared to the first quarter of 2003, was primarily due to our  acquisitions of
Monterey Bay Bank in the third  quarter of 2003 and Business  Bank of California
in the first quarter of 2004.

     RESIDENTIAL MORTGAGE LOANS

     We originate  residential  mortgage  loans,  secured by one-to-four  family
residential   properties,   through  our  multiple  channel  network  (including
branches, mortgage brokers, and loan-by-phone) throughout California, Oregon and
Washington, and we periodically purchase loans in our market area.

     The residential mortgages increase of $844.5 million, or 13 percent, in the
first quarter of 2004,  compared to the first quarter of 2003, was influenced by
a high refinance  market driven by low interest rates during 2003. While we hold
most of the  loans  we  originate,  we sell  most of our  30-year,  fixed  rate,
non-Community Reinvestment Act (CRA) residential mortgage loans.

     CONSUMER LOANS

     We originate  consumer loans,  such as auto loans and home equity loans and
lines, through our branch network.  Consumer loans increased $55.1 million, or 3
percent, primarily as a result of an increase in home equity loans and partially
offset by  pay-offs  related to the  run-off of the  automobile  dealer  lending
business  that we exited in the third quarter of 2000.  The indirect  automobile
dealer lending portfolio at March 31, 2004 was $49.5 million.



                                       29
<PAGE>



     LEASE FINANCING

     We offer primarily two types of leases to our customers:  direct  financing
leases,  where the assets leased are acquired without additional  financing from
other  sources;  and  leveraged  leases,  where  a  substantial  portion  of the
financing  is  provided  by debt with no  recourse  to us.  The lease  financing
decrease  of  $119.2  million,  or 16  percent,  in the first  quarter  of 2004,
compared  to the  first  quarter  of 2003,  was  attributable  to our  announced
discontinuance of our auto leasing activity,  effective April 20, 2001. At March
31,  2004,  our auto  lease  portfolio  had  declined  to $71.2  million  and is
projected to decline 60 percent by December  2004,  and fully mature by mid-year
2006.  Included in our lease  portfolio are leveraged  leases of $536.3 million,
which are net of non-recourse debt of approximately  $1.2 billion.  We utilize a
number of special  purpose  entities for our leveraged  leases.  These  entities
serve  legal  and  tax  purposes  and do  not  function  as  vehicles  to  shift
liabilities  to other  parties  or to  deconsolidate  affiliates  for  financial
reporting  purposes.  As  allowed  by U.S.  GAAP  and by law,  the  gross  lease
receivable is offset by the  qualifying  non-recourse  debt. In leveraged  lease
transactions,  the third-party  lender may only look to the collateral  value of
the leased assets for repayment.

     LOANS ORIGINATED IN FOREIGN BRANCHES

     Our loans originated in foreign  branches  consist  primarily of short-term
extensions of credit to financial  institutions  located  primarily in Asia. The
loans  originated  in  foreign  branches  in the  first  quarter  of  2004  were
relatively flat compared to the first quarter of 2003.

     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,  2003,  December  31, 2003 and March 31,  2004,  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, 2003
Korea......................     $651         $--             $90             $741
December 31, 2003
Korea......................     $630         $--             $28             $658
March 31, 2004
Korea......................     $640         $--             $12             $652

</TABLE>


PROVISION FOR CREDIT LOSSES

     We recorded a reversal of provision  for credit losses of $5 million in the
first quarter of 2004,  compared with a $30 million  provision for credit losses
in the first quarter of 2003. 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.  Reversals of provisions for credit losses increase our income and reduce
the allowance.


                                       30
<PAGE>


ALLOWANCE FOR CREDIT LOSSES

     ALLOWANCE POLICY AND METHODOLOGY

     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 and certain  unused  commitments,  in each case based on the internal risk
grade of such loans,  leases and commitments.  Changes in risk grades affect the
amount of the formula  allowance.  Loss factors are based on 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, 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;



                                       31
<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.  This includes
changing the number of periods that are included in the  calculation of the loss
factors and adjusting  qualitative  factors to be representative of the economic
cycle that will impact the portfolio.

     COMPARISON OF THE TOTAL  ALLOWANCE AND RELATED  PROVISION FOR CREDIT LOSSES
     FROM DECEMBER 31, 2003

     At  December  31,  2003,  our total  allowance  for credit  losses was $533
million,  or 2.05 percent of the total loan  portfolio  and 190 percent of total
nonaccrual  loans.  At March 31, 2004, our total allowance for credit losses was
$521 million  (consisting  of $324  million and $197  million of  allocated  and
unallocated  allowance,  respectively),  or  2.00  percent  of  the  total  loan
portfolio and 203 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, 2003,  total impaired  loans were $230 million,  and the
associated impairment allowance was $55 million,  compared with $206 million and
$52 million, respectively, at March 31, 2004. On March 31, 2004 and December 31,
2003, the total  allowance for credit losses for off-balance  sheet  commitments
was $67 million and $86 million, respectively.

     During  the first  quarter  of 2004,  there  were no  material  changes  in
estimation  methods or assumptions  that affected our  methodology for assessing
the  appropriateness  of the formula and specific  allowances for credit losses,
except that the period used to calculate the cumulative loss rates on criticized
loans was  expanded  from 12 to 24 quarters to better  estimate  losses over the
life of the loans.  The  incremental  increase in loss  factors from this longer
view  resulted  in an  increase  of  approximately  $9  million  in the  formula
allowance.  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.


                                       32
<PAGE>


     As a result of management's assessment of factors,  including the continued
slow,  but  improving,  U.S.  economy;  the adverse impact of soaring fuel costs
across the whole economy,  and fears of terrorism on the airline  industry;  the
fiscal and budgetary difficulties of the State of California; 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 reversal of
provision for credit losses of $5 million in the first quarter of 2004.

     CHANGES IN THE ALLOCATED (FORMULA AND SPECIFIC) ALLOWANCE

     At March 31, 2004, the formula allowance was $249 million, compared to $280
million at December  31,  2003,  a decrease of $31  million,  due  primarily  to
substantial decreases in classified credit balances.  The specific allowance was
$75 million at March 31,  2004,  compared to $80 million at December 31, 2003, a
decrease of $5 million.  This decrease is  proportional to decreases in impaired
loans.

     CHANGES IN THE UNALLOCATED ALLOWANCE

     At March 31, 2004, the unallocated allowance rose to $197 million from $173
million at December 31, 2003. The reasons for the increase are detailed below.

     In our assessment as of March 31, 2004,  management focused, in particular,
on the factors and conditions set out below.  There can be no assurance that the
adverse  impact  of any of these  conditions  on us will not be in excess of the
ranges set forth.

     o    With respect to fuel prices,  management established a new factor as a
          result of the sustained high prices of oil and petroleum products, and
          the impact across virtually all sectors of the economy, which could be
          in the range of $10 million to $35 million.

     o    With  respect  to  the  real  estate  sector,   management  considered
          nationally high vacancy rates and stagnant rent growth,  with specific
          weakness  in Northern  California,  which could be in the range of $16
          million to $32 million.

     o    With  respect  to  the   communications/media   industry,   management
          considered   improving   advertising   revenues   contrasted   against
          subscriber erosion for cable companies,  resulting from municipalities
          allowing  competitors to enter previously  monopolistic  markets,  and
          some  consolidation in the wireless segment of the  telecommunications
          industry, which could be in the range of $9 million to $27 million.

     o    With respect to power  companies/utilities,  management considered the
          excess  capacity  and flat  demand  in the  power  generation  market,
          exacerbated by higher  natural gas prices in the U.S.,  which could be
          in the range of $11 million to $23 million.

     o    With  respect  to  cross-border   loans  and  acceptances  to  certain
          Asia/Pacific   Rim   countries,    management   considered   improving
          performances  in  many  countries,  offset  by high  unemployment  and
          household  debt, as well as political  disruption in the  Philippines,
          which could be in the range of $12 million to $21 million.

     o    With respect to leasing, management considered the worsening situation
          for airlines in the wake of increased  fears of terrorism  and surging
          fuel prices, which could be in the range of $7 million to $13 million.

     o    With  respect  to  the  State  of  California,  management  considered
          underlying   uncertainties   confronting  the  new  administration  in
          Sacramento,  including  the major  shortfall in the state's  budgetary
          position   for  fiscal  year  2005,   despite  the  passage  of  State
          Propositions  57 and 58,  which could be in the range of $6 million to
          $12 million.



                                       33
<PAGE>


     o    With respect to the retail  sector,  management  considered  improving
          sales growth, compared to that experienced in 2003, against a backdrop
          of ever higher household debt at a time of considerable employment and
          income  uncertainty,  which could be in the range of $4 million to $10
          million.

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

     CHANGE IN THE TOTAL ALLOWANCE FOR CREDIT LOSSES

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

<TABLE>
<CAPTION>


                                                           FOR THE THREE MONTHS
                                                              ENDED MARCH 31,
                                                          ----------------------
(DOLLARS IN THOUSANDS)                                      2003          2004
--------------------------------------------------------  --------      --------
<S>                                                       <C>           <C>
Balance, beginning of period............................  $609,190      $532,970
Loans charged off:
  Commercial, financial and industrial..................    37,826        19,788
  Mortgage..............................................        --            --
  Consumer..............................................     2,656         1,815
  Lease financing.......................................    19,018           358
                                                          --------      --------
  Total loans charged off...............................    59,500        21,961
Recoveries of loans previously charged off:
  Commercial, financial and industrial..................     5,579         8,819
  Mortgage..............................................       106            --
  Consumer..............................................       723           435
  Lease financing.......................................       118            73
                                                          --------      --------
  Total recoveries of loans previously
    charged off.........................................     6,526         9,327
                                                          --------      --------
  Net loans charged off.................................    52,974        12,634
(Reversal of) provision for credit losses...............    30,000        (5,000)
Foreign translation adjustment and other net
  additions (deductions)(1).............................       (19)        5,775
                                                          --------      --------
Balance, end of period..................................  $586,197      $521,111
                                                          ========      ========

Allowance for credit losses to total loans..............      2.21%         2.00%
(Reversal of) provision for credit losses to net loans
  charged off...........................................     56.63            nm
Net loans charged off to average loans
  outstanding for the period(2).........................      0.80          0.19

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

(1)  Includes  a  transfer  of $5.7  million  related  to the  Business  Bancorp
     acquisition in the first quarter of 2004.

(2)  Annualized.

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

     Total loans  charged off in the first  quarter of 2004  decreased  by $37.5
million  from the  first  quarter  of 2003,  primarily  due to an $18.0  million
decrease in commercial,  financial and industrial loans charged off and an $18.7
million  decrease in lease  financing  charge-offs  reflecting  the  charge-offs
related  to several  airline  leases in the first  quarter of 2003.  Charge-offs
reflect  the  realization  of  losses  in the  portfolio  that  were  recognized
previously through provisions for credit losses.


                                       34
<PAGE>


     First quarter 2004 recoveries of loans previously  charged off increased by
$2.8 million from the first quarter of 2003. The percentage of net loans charged
off to average loans  outstanding  for the first quarter of 2004 decreased by 61
basis points from the same period in 2003. At March 31, 2004,  the allowance for
credit  losses  exceeded the  annualized  net loans charged off during the first
quarter  of  2004,  reflecting  management's  belief,  based  on  the  foregoing
analysis, that there are additional losses inherent in the portfolio.

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

NONPERFORMING ASSETS

     Nonperforming assets consist of nonaccrual loans, distressed loans held for
sale, and foreclosed assets. Nonaccrual loans are those for which management has
discontinued accrual of interest because there exists significant uncertainty as
to the full and timely  collection of either principal or interest or such loans
have  become  contractually  past  due 90 days  with  respect  to  principal  or
interest. For a more detailed discussion of the accounting for nonaccrual loans,
see Note 1 to our Consolidated  Financial  Statements  included in the Form 10-K
for the year ended December 31, 2003.

     Distressed loans held for sale are loans, which would otherwise be included
in nonaccrual loans, but that have been identified for accelerated  disposition.
Disposition of these assets is  contemplated  within a short period of time, not
to exceed one year.  There were no  distressed  loans held for sale at March 31,
2003, December 31, 2003 and March 31, 2004.

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

     The following table sets forth an analysis of nonperforming assets.

<TABLE>
<CAPTION>


                                                         MARCH 31,   DECEMBER 31,   MARCH 31,
(DOLLARS IN THOUSANDS)                                      2003         2003          2004
-------------------------------------------------------  ---------   ------------   ---------
<S>                                                      <C>         <C>            <C>
Commercial, financial and industrial...................  $ 273,196   $    190,404   $ 177,636
Commercial mortgage....................................     25,675         38,354      27,354
Lease financing........................................     84,712         51,603      51,121
Loan originated in foreign branches....................      3,000            840         630
                                                         ---------   ------------   ---------
  Total nonaccrual loans...............................    386,583        281,201     256,741
Foreclosed assets......................................        389          5,689       6,153
                                                         ---------   ------------   ---------
  Total nonperforming assets...........................  $ 386,972   $    286,890   $ 262,894
                                                         =========   ============   =========
Allowance for credit losses............................  $ 586,197   $    532,970   $ 521,111
                                                         =========   ============   =========
Nonaccrual loans to total loans........................       1.46%          1.08%       0.99%
Allowance for credit losses to nonaccrual
  loans................................................     151.64         189.53      202.97
Nonperforming assets to total loans, distressed
  loans held for sale and foreclosed assets............       1.46           1.11        1.01
Nonperforming assets to total assets...................       0.96           0.68        0.57

</TABLE>


     At March 31, 2004,  nonaccrual  loans totaled $257  million,  a decrease of
$130 million, or 34 percent,  from March 31, 2003. Our nonperforming  assets are
concentrated in our non-agented  syndicated loan portfolio and  approximately 46
percent  of our  total  nonaccrual  loans are  syndicated  loans.  In  addition,
nonaccrual  loans include $52 million in aircraft  leases,  of which $14 million
are in the process of being  renegotiated into operating leases. The decrease in
nonaccrual  loans was primarily due to pay-downs,  charge-offs,  and loan sales,
coupled with  significantly  reduced inflows.  During the first quarters of 2004
and 2003,  respectively,  we sold  approximately  $11 million and $98 million of
loan  commitments  to reduce our credit  exposures.  Losses from these sales are
reflected in our charge-offs.


                                       35
<PAGE>


     Nonaccrual  loans as a percentage of total loans were 0.99 percent at March
31, 2004, compared with 1.46 percent at March 31, 2003.  Nonperforming assets as
a percentage of total loans and foreclosed  assets  decreased to 1.01 percent at
March  31,  2004,  from  1.46  percent  at March 31,  2003.  At March 31,  2004,
approximately  69  percent of  nonaccrual  loans  were  related  to  commercial,
financial and industrial credits, compared to 71 percent at March 31, 2003.

LOANS 90 DAYS OR MORE PAST DUE AND STILL ACCRUING

<TABLE>
<CAPTION>


                                                 MARCH 31,     DECEMBER 31,    MARCH 31,
(DOLLARS IN THOUSANDS)                              2003           2003           2004
-----------------------------------------------  ---------     ------------    ---------
<S>                                              <C>           <C>             <C>
Commercial, financial and industrial...........  $  10,413     $        893    $     401
Construction...................................         --               --        1,318
Mortgage:
  Residential..................................      5,818            1,878        5,421
  Commercial...................................        803               --          118
                                                 ---------     ------------    ---------
  Total mortgage...............................      6,621            1,878        5,539
Consumer and other.............................      2,123            1,123        1,665
                                                 ---------     ------------    ---------
  Total loans 90 days or more past due
    and still accruing.........................  $  19,157     $      3,894    $   8,923
                                                 =========     ============    =========

</TABLE>


QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

     Market risk is the risk of loss to future earnings,  to fair values,  or to
future  cash  flows  that may result  from  changes in the price of a  financial
instrument.  The  value of a  financial  instrument  may  change  as a result of
changes in interest rates,  foreign currency  exchange rates,  commodity prices,
equity  prices,  and other  market  changes  that affect  market risk  sensitive
instruments.  Market risk is attributable to all market risk sensitive financial
instruments,  including securities,  loans, deposits, and borrowings, as well as
derivative  instruments.  Our exposure to market risk is a function of our asset
and liability management activities, our trading activities for our own account,
and our role as a financial intermediary in customer-related  transactions.  The
objective of market risk  management is to mitigate an undue  adverse  impact on
earnings  and  capital  arising  from  changes in  interest  rates and prices of
financial  instruments.  This  risk  management  objective  supports  our  broad
objective of preserving  shareholder  value,  which encompasses  earnings growth
over time and capital stability.

     The management of market risk is governed by policies reviewed and approved
annually by our Board. In the  administration  of the Board policies,  under the
guidance and oversight of the Chief  Executive  Officer  Forum (CEO Forum),  the
Asset &  Liability  Management  Committee  (ALCO) is  responsible  for  managing
liquidity risk, interest rate risk and price risk. ALCO is a committee comprised
of UnionBanCal  Corporation senior executives,  with the chairman  designated by
the Chief  Executive  Officer.  ALCO meets monthly and reports  regularly to the
Chief Executive Officer Forum and 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  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


                                       36
<PAGE>


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

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

     INTEREST RATE RISK MANAGEMENT (OTHER THAN TRADING)

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

     The ALM Policy approved by our Board's Finance & Capital Committee 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 over various time horizons.

     Our  unhedged  NII remains  inherently  asset  sensitive,  meaning that our
assets  generally  reprice more quickly than our  liabilities,  particularly our
core deposits.  Since the NII associated with an asset  sensitive  balance sheet
tends to decrease when interest  rates decline and increase when interest  rates
rise,  derivative  hedges and the  investment  portfolio are used to manage this
risk.  In the first  quarter of 2004,  we  continued to increase the size of our
securities  portfolio,   principally  through  purchases  of  intermediate  term
mortgage-backed and agency issued securities.  In addition, we entered into $900
million of interest rate caps and cap corridors to offset the potential  adverse
impact that rising  short-term  interest rates could have on our cost of deposit
funding.  We also entered into $800 million of interest rate swaps to hedge some
of our variable rate loans. For a further  discussion of derivative  instruments
and our hedging  strategies,  see Note 6 to our Notes to Condensed  Consolidated
Financial Statements included in this Form 10-Q.

     Together,  our hedging and investment activities resulted in an essentially
neutral  interest rate risk profile for the hedged balance sheet with respect to
parallel  yield curve shifts in terms of simulated NII versus the no rate change
base case scenario. However, our NII is also sensitive to non-parallel shifts in
the yield curve.  In general,  our adjusted 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 adjusted
NII. In this respect,  our adjusted NII is asset sensitive when measured against
changes in long rates and slightly  liability  sensitive  when measured  against
changes in short rates.

     In the  current  low  rate  environment,  run  off of  fixed  rate  assets,
including  prepayments,  depresses  NII even if  interest  rates  do not  change
because  the cash flows from the repaid and  prepaid  assets that were booked at
higher rates must be reinvested at lower prevailing rates.

     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


                                       37
<PAGE>



no change,  scenario.  The following table sets forth the simulation  results in
both the up and down 200 basis point ramp  scenarios as of December 31, 2003 and
March 31, 2004(1):

<TABLE>
<CAPTION>

                                        DECEMBER 31,      MARCH 31,
(DOLLARS IN MILLIONS)                       2003             2004
--------------------------------------  ------------      ---------
<S>                                        <C>              <C>
+200 basis points.....................     $17.2            $31.1
as a percentage of base case NII......       1.20%            2.18%
-200 basis points.....................    $(19.8)          $(36.7)
as a percentage of base case NII......       1.38%            2.57%

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

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

     EaR in the down 200 basis point scenario was a negative  $36.7 million,  or
2.57 percent of adjusted NII in the base case scenario,  well within the Board's
guidelines. The increase in asset sensitivity measured at quarter-end,  as shown
in  the  above  table,  was  accentuated  by  the  significant   deposit  growth
experienced late in the quarter and a corresponding increase in short-term money
market  assets.  Asset  sensitivity  measured on a quarterly  average  basis was
materially lower than the March 31, 2004 figures shown in the table above.

     However,  with federal funds and LIBOR rates  already below two percent,  a
downward  ramp  scenario of 200 basis  points would  result in  short-term  rate
levels below zero. As a result,  we believe that a downward ramp scenario of 100
basis  points  provides  a more  reasonable  measure of asset  sensitivity  in a
falling interest rate environment.  As of March 31, 2004, the difference between
adjusted  NII in the base case and  adjusted NII after a gradual 100 basis point
downward ramp was a negative $18.9 million, or 1.32 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
equations,  and  discretionary  derivative  hedges and fixed income  portfolios,
which are allowed to mature without replacement.

     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.

     At December 31, 2003 and March 31, 2004, our securities  available for sale
portfolio included $10.4 billion and $11.1 billion,  respectively, of securities
for ALM purposes with an expected weighted average maturity of 2.9 years and 2.5
years,  respectively.  In  addition,  this  portfolio  had an overall  estimated
effective  duration of 2.1 compared to 2.5 at December  31, 2003.  Duration is a
measure  of price  sensitivity  of a bond  portfolio  to  immediate  changes  in
interest rates.  An effective  duration of 2.1 suggests an expected price change
of approximately 2.1 percent


                                       38
<PAGE>


for an immediate one percent change in interest rates.  This portfolio  included
$5.3 billion in  mortgage-backed  securities with an estimated  duration of 2.4.
This securities  portfolio duration,  in the context of our total balance sheet,
after giving consideration to the composition of our core deposits,  contributes
to the  maintenance  of our current,  essentially  neutral,  interest  rate risk
profile.

     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 the securities and foreign exchange  trading  activities for our
own account, 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
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  stockholders'  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 for our
trading  activities  for the year ended  December 31, 2003 and the quarter ended
March 31, 2004.

<TABLE>
<CAPTION>


                                      DECEMBER 31, 2003           MARCH 31, 2004
                                   ----------------------    ----------------------
                                   AVERAGE    HIGH    LOW    AVERAGE    HIGH    LOW
(DOLLARS IN THOUSANDS)               VAR       VAR    VAR      VAR       VAR    VAR
--------------------------------   -------    ----    ---    -------    ----    ---
<S>                                 <C>       <C>     <C>       <C>     <C>     <C>
Foreign exchange................    $143      $428    $57       $146    $239    $75
Securities......................     206       463     97        211     483     86


</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  Finance  and  Capital  Committee  of the Board.  As a result,  our  foreign
exchange   business   continues   to  derive  the  bulk  of  its  revenue   from
customer-related  transactions.  We take inter-bank  trading positions only on a
limited basis and we do not take any large or long-term  strategic  positions in
the market  for our own  portfolio.  We  continue  to grow our  customer-related
foreign exchange business while maintaining an essentially  unchanged inter-bank
trading risk profile as measured under our VaR methodology.

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


                                       39
<PAGE>



     Our interest rate derivative contracts included, as of March 31, 2004, $4.0
billion notional amount of derivative contracts entered into as an accommodation
for customers.  We act as an intermediary and match these contracts, at a credit
spread,  to contracts with major dealers,  thus  neutralizing the related market
risk.

LIQUIDITY RISK

     Liquidity risk represents the potential for loss as a result of limitations
on our ability to adjust our future  cash flows to meet the needs of  depositors
and borrowers and to fund operations on a timely and  cost-effective  basis. The
ALM Policy  approved by the Finance and Capital  Committee of 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  company-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,  and savings and consumer time deposits,  combined with
average common stockholders'  equity,  funded 84 percent of average total assets
of $43.1 billion in the first quarter of 2004. 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.  In the fourth  quarter of 2003, we issued $400 million in long-term
subordinated  debt.  In  February  2004,  we used a portion of the net  proceeds
(approximately  $350  million)  from the sale of these  securities to redeem our
outstanding Trust Notes. The remainder of the net proceeds from this offering is
for general corporate purposes, which may include extending credit to or funding
investments  in our  subsidiaries,  repurchasing  shares  of our  common  stock,
reducing our existing indebtedness or financing possible acquisitions.

     The securities  portfolio provides additional  enhancement to our liquidity
position,  which may be created  through either  securities  sales or repurchase
agreements.  At  March  31,  2004,  we  could  have  sold or  transferred  under
repurchase  agreements  approximately  $8.7  billion of our  available  for sale
securities,  with no portion of this balance being encumbered at March 31, 2004.
Liquidity  may also be provided by the sale or maturity of other  assets such as
interest-bearing  deposits in banks,  federal  funds sold,  and trading  account
securities.  The aggregate balance of these assets averaged  approximately  $1.3
billion  in the first  quarter of 2004.  Additional  liquidity  may be  provided
through loan  maturities and sales.  In the third quarter of 2003, we terminated
the issuance of  commercial  paper under  UnionBanCal  Corporation's  commercial
paper  program.   UnionBanCal  Commercial  Funding  Corporation  (a  UnionBanCal
Corporation  subsidiary)  continues  to issue  commercial  paper  under  another
commercial  paper  program.  The proceeds of this  commercial  paper program are
deposited  in  Union  Bank  of  California,  N.A.  and  used to  fund  our  Bank
operations.






                                       40
<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)            2003                  2003                  2004            REQUIREMENT
--------------------------- -----------------    -----------------    -----------------    -----------------
<S>                         <C>         <C>      <C>         <C>      <C>         <C>      <C>          <C>
CAPITAL COMPONENTS
Tier 1 capital.............   $ 3,739,690           $ 3,747,884          $ 3,510,616
Tier 2 capital.............       576,214               936,189              946,422
                            -----------------    -----------------    -----------------
Total risk-based capital...   $ 4,315,904           $ 4,684,073          $ 4,457,038
                            =================    =================    =================
Risk-weighted assets.......   $33,001,706           $33,133,407          $34,132,921
                            =================    =================    =================
Quarterly average assets...   $38,169,532           $41,506,828          $42,597,143
                            =================    =================    =================

CAPITAL RATIOS                AMOUNT    RATIO      AMOUNT    RATIO      AMOUNT    RATIO      AMOUNT    RATIO
--------------------------  ----------  -----    ----------  -----    ----------  -----    ----------  -----
Total capital (to risk-
  weighted assets)........  $4,315,904  13.08%   $4,684,073  14.14%   $4,457,038  13.06%  >$2,730,634   8.0%
                                                                                          -
Tier 1 capital (to risk-
  weighted assets)........   3,739,690  11.33     3,747,884  11.31     3,510,616  10.29   > 1,365,317   4.0
                                                                                          -
Leverage(1)...............   3,739,690   9.80     3,747,884   9.03     3,510,616   8.24   > 1,703,886   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)            2003                  2003                  2004            REQUIREMENT        REQUIREMENT
--------------------------- -----------------    -----------------    -----------------    ----------------- ------------------
<S>                         <C>         <C>      <C>         <C>      <C>         <C>      <C>           <C>   <C>         <C>
CAPITAL COMPONENTS
Tier 1 capital.............   $ 3,448,720           $ 3,395,519         $ 3,513,066
Tier 2 capital.............       486,329               467,619             479,639
                            -----------------    -----------------    -----------------
Total risk-based capital...   $ 3,935,049           $ 3,863,138         $ 3,992,705
                            =================    =================    =================
Risk-weighted assets.......   $32,389,193           $32,526,017         $33,506,773
                            =================    =================    =================
Quarterly average assets...   $37,368,882           $40,921,517         $42,045,737
                            =================    =================    =================

CAPITAL RATIOS                AMOUNT    RATIO      AMOUNT    RATIO      AMOUNT    RATIO      AMOUNT    RATIO     AMOUNT   RATIO
--------------------------- ----------  -----    ----------  -----    ---------   -----    ----------  -----   ---------- -----
Total capital (to risk-
  weighted assets)......... $3,935,049  12.15%   $3,863,138  11.88%   $3,992,705  11.92%  >$2,680,542    8.0% >$3,350,677  10.0%
                                                                                          -                   -
Tier 1 capital (to risk-
  weighted assets).........  3,448,720  10.65     3,395,519  10.44     3,513,066  10.48   > 1,340,271    4.0  > 2,010,406   6.0
                                                                                          -                   -
Leverage(1)................  3,448,720   9.23     3,395,519   8.30     3,513,066   8.36   > 1,681,829    4.0  > 2,102,287   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).

     Included in Tier 1 capital at year-end  2003 was $350  million in preferred
securities,  which we redeemed on February  19, 2004  resulting in a decrease in
our capital  ratios  compared  with March 31, 2003 and  December  31,  2003.  In
December of 2003, we issued $400 million of long-term  subordinated  debt, which
is included in Tier 2 capital as of December 31, 2003 (further discussion of our
subordinated debt can be found in Note 11 of the Notes to Consolidated Financial
Statements included in the Form 10-K for the year ended December 31, 2003).

     Compared  with March 31,  2003,  in  addition to the changes to our capital
structure  mentioned in the above paragraph,  the decrease in our capital ratios
was also attributable to higher  risk-weighted  assets,  partly offset by higher
equity. Our leverage ratio decrease was primarily  attributable to a $4 billion,
or 12 percent, increase in quarterly average assets, which was substantially the
result of an increase in our securities portfolio.



                                       41
<PAGE>


     As of March 31, 2004,  management believes the capital ratios of Union Bank
of  California,  N.A.  met all  regulatory  requirements  of  "well-capitalized"
institutions,  which are 10 percent for the Total  risk-based  capital  ratio, 6
percent for the Tier 1 risk-based  capital  ratio and 5 percent for the leverage
ratio.

BUSINESS SEGMENTS

     We  segregate  our  operations  into four  primary  business  units for the
purpose of management reporting, as shown in the table that follows. 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 table on the following page 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.  In addition,  the tables include performance
center earnings.  A performance center is a special unit whose income generating
activities,  unlike typical profit centers,  are based on other business segment
units'  customer  base. The revenues  generated and expenses  incurred for those
transactions  entered into to  accommodate  our customers are allocated to other
business  segments  where  the  customer  relationships  reside.  A  performance
center's purpose is to foster  cross-selling with a total  profitability view of
the products and services it manages.  For example,  the 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 U.S. 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.



                                       42
<PAGE>



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

<TABLE>
<CAPTION>


                                                COMMUNITY BANKING
                                                  AND INVESTMENT        COMMERCIAL FINANCIAL       INTERNATIONAL
                                                     SERVICES              SERVICES GROUP          BANKING GROUP
                                               --------------------     --------------------    -------------------
                                                              AS OF AND FOR THE THREE MONTHS ENDED MARCH 31,
                                               --------------------------------------------------------------------
                                                 2003        2004         2003        2004       2003        2004
                                               --------    --------     --------    --------    -------     -------
<S>                                            <C>         <C>          <C>         <C>         <C>         <C>
RESULTS OF OPERATIONS AFTER PERFORMANCE
  CENTER EARNINGS (DOLLARS IN THOUSANDS):
  Net interest income........................  $167,861    $182,667     $179,232    $183,506    $ 8,958     $ 7,808
  Noninterest income.........................   101,627     116,600       57,912      69,627     15,483      18,189
                                               --------    --------     --------    --------    -------     -------
  Total revenue..............................   269,488     299,267      237,144     253,133     24,441      25,997
  Noninterest expense........................   199,891     218,984       98,759     104,643     14,935      15,683
  Credit expense (income)....................     7,718       7,787       42,462      31,226        505         604
                                               --------    --------     --------    --------    -------     -------
  Income (loss) before income tax
    expense (benefit)........................    61,879      72,496       95,923     117,264      9,001       9,710
  Income tax expense (benefit)...............    23,668      27,730       30,680      38,249      3,443       3,714
                                               --------    --------     --------    --------    -------     -------
  Net income (loss)..........................  $ 38,211    $ 44,766     $ 65,243    $ 79,015    $ 5,558     $ 5,996
                                               ========    ========     ========    ========    =======     =======
PERFORMANCE CENTER EARNINGS (DOLLARS
  IN THOUSANDS):
  Net interest income........................  $    202    $    172     $   (206)   $   (117)   $     4     $     9
  Noninterest income.........................   (10,364)    (10,552)      14,849      16,618        332         273
  Noninterest expense........................    (8,201)     (9,195)       8,307       9,576        252          43
  Net income (loss)..........................    (1,231)       (749)       3,956       4,312         52         147
  Total loans (dollars in millions)..........        27          27          (47)        (44)        --          --
AVERAGE BALANCES (DOLLARS IN MILLIONS):
  Total loans(1).............................  $ 11,113    $ 12,092     $ 13,534    $ 12,085    $ 1,525     $ 1,565
  Total assets...............................    12,027      13,310       15,590      14,193      1,923       2,004
  Total deposits(1)..........................    15,790      18,666       11,353      13,338      1,518       1,663
FINANCIAL RATIOS:
  Risk adjusted return on capital(2).........        25%         26%          15%         22%        38%         42%
  Return on average assets(2)................      1.29        1.35         1.70        2.24       1.17        1.20
  Efficiency ratio(3)........................      74.2        73.2         41.6        41.3       61.1        60.3

                                                      GLOBAL                                        UNIONBANCAL
                                                   MARKETS GROUP                OTHER               CORPORATION
                                               --------------------     --------------------    --------------------
                                                            AS OF AND FOR THE THREE MONTHS ENDED MARCH 31,
                                               ---------------------------------------------------------------------
                                                 2003        2004         2003        2004        2003        2004
                                               --------    --------     --------    --------    --------    --------
RESULTS OF OPERATIONS AFTER PERFORMANCE
  CENTER EARNINGS (DOLLARS IN THOUSANDS):
  Net interest income........................  $ 21,092    $  1,151     $ 13,637    $ 25,289    $390,780    $400,421
  Noninterest income.........................     1,526       1,541        9,223       5,248     185,771     211,205
                                               --------    --------     --------    --------    --------    --------
  Total revenue..............................    22,618       2,692       22,860      30,537     576,551     611,626
  Noninterest expense........................     4,487       6,427       24,528      27,369     342,600     373,106
  Credit expense (income)....................        50          50      (20,735)    (44,667)     30,000      (5,000)
                                               --------    --------     --------    --------    --------    --------
  Income (loss) before income tax
    expense (benefit)........................    18,081      (3,785)      19,067      47,835     203,951     243,520
  Income tax expense (benefit)...............     6,916      (1,448)       3,727      17,788      68,434      86,033
                                               --------    --------     --------    --------    --------    --------
  Net income (loss)..........................  $ 11,165    $ (2,337)    $ 15,340    $ 30,047    $135,517    $157,487
                                               ========    ========     ========    ========    ========    ========
PERFORMANCE CENTER EARNINGS (DOLLARS
  IN THOUSANDS):
  Net interest income........................  $   (102)   $   (164)    $    102    $    100    $     --    $     --
  Noninterest income.........................    (8,072)    (10,196)       3,255       3,857          --          --
  Noninterest expense........................    (1,628)     (1,906)       1,270       1,482          --          --
  Net income (loss)..........................    (4,042)     (5,221)       1,265       1,511          --          --
  Total loans (dollars in millions)..........        --          --           20          17          --          --
AVERAGE BALANCES (DOLLARS IN MILLIONS):
  Total loans(1).............................  $    214    $    126     $    337    $    274    $ 26,723    $ 26,142
  Total assets...............................     7,967      12,382          841       1,162      38,348      43,051
  Total deposits(1)..........................     1,207       1,099        1,210       1,174      31,078      35,940
FINANCIAL RATIOS:
  Risk adjusted return on capital(2).........         4%         (1)%         na          na          na          na
  Return on average assets(2)................      0.57       (0.08)          na          na        1.43%       1.47%
  Efficiency ratio(3)........................      19.8       238.7           na          na        59.4        60.8

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

(1)  Represents  loans and deposits for each business  segment after  allocation
     between the  segments of loans and deposits  originated  in one segment but
     managed by another segment.

(2)  Annualized.

(3)  The efficiency  ratio is noninterest  expense,  excluding  foreclosed asset
     expense  (income),  as a percentage of net interest  income and noninterest
     income.  Foreclosed  asset expense was $0.1 million and $0.5 million in the
     first quarters of 2003 and 2004, respectively.

na = not applicable

</FN>
</TABLE>

                                       43
<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 2004,  net income  increased  $6.6  million,  or 17
percent,  compared to the first  quarter of 2003.  In the first quarter of 2004,
total revenue  increased  $29.8  million,  or 11 percent,  compared to the first
quarter of 2003.  Increased  asset and  deposit  volumes  offset the effect of a
lower interest rate  environment  leading to an increase of $14.8 million,  or 9
percent,  in net interest  income over the first  quarter of 2003.  In the first
quarter of 2004,  noninterest  income was $15.0 million,  or 15 percent,  higher
than the first quarter of 2003 primarily due to our acquisitions and new de novo
branches in 2003 and the first quarter of 2004, higher  deposit-related  service
fees and  higher  trust and  investment  management  fees.  Noninterest  expense
increased $19.1 million, or 10 percent, in the first quarter of 2004 compared to
the first quarter of 2003, with the majority of that increase being attributable
to higher salaries and employee  benefits mainly related to our acquisitions and
new de novo branches,  deposit gathering,  small business growth and residential
loan growth over the first quarter of 2003.

     In 2004, the Community  Banking and Investment  Services Group continues to
emphasize  growing the consumer asset  portfolio,  expanding  wealth  management
services, extending the small business franchise,  expanding the branch network,
and expanding  cross selling  activities  throughout  the Bank. The strategy for
growing the  consumer  asset  portfolio  primarily  focused on mortgage and home
equity products that may be originated  through the branch  network,  as well as
through channels such as wholesalers,  correspondents, and whole loan purchases.
As of March  31,  2004,  residential  mortgages  grew by $844.5  million,  or 13
percent,  from the first  quarter of 2003.  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.  It is anticipated  that expansion of the
distribution  network  will be  achieved  through  acquisitions  and new  branch
openings.  On July 1, 2003, we completed the acquisition of Monterey Bay Bank, a
$632 million asset savings and loan  association  headquartered  in Watsonville,
California,  with eight full-service  branches in the Greater Monterey Bay area.
On  January  16,  2004,  we  completed  our  acquisition  of  Business  Bank  of
California, a commercial bank headquartered in San Bernardino,  California, with
$704  million  in assets  and  fifteen  full-service  branches  in the  Southern
California Inland Empire and the San Francisco Bay Area.

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

     COMMUNITY BANKING serves its customers through 298 full-service branches in
California,  4 full-service branches in Oregon and Washington,  and a network of
565 proprietary  ATMs.  Customers may also access our services 24 hours a day by
telephone  or through our WEBSITE at  www.uboc.com.  In  addition,  the division
offers automated teller and point-of-sale merchant services.

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

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

     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;



                                       44
<PAGE>



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

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

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

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

     o    Our  brokerage   products  and  services  are  provided  through  UBOC
          Investment  Services,   Inc.,  a  registered   broker/dealer  offering
          investment  products to individuals and institutional  clients,  whose
          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 its position in our target markets.

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

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

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

     INSURANCE  SERVICES  provides  a range  of  risk  management  services  and
insurance  products to business and retail customers.  The group, which includes
our 2001 acquisition of Armstrong/Robitaille, Inc., our 2002 acquisition of John
Burnham & Company,  and our 2003 acquisitions of Tanner Insurance Brokers,  Inc.
and Knight Insurance Agency,  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.


                                       45
<PAGE>



     The group  competes  with larger  banks by  attempting  to provide  service
quality superior to that of its major competitors.  The group's primary means of
competing with community  banks include its branch network and its technology to
deliver  banking  services.  The group also offers  convenient  banking hours to
consumers through our drive-through banking locations and selected branches that
are open seven days a week.

     The group  competes  with a number of  commercial  banks,  internet  banks,
savings  associations and credit unions,  as well as more specialized  financial
service  providers  such as investment  brokerage  companies,  consumer  finance
companies,  and residential real estate lenders. The group's primary competitors
are other  major  depository  institutions  such as Bank of  America,  Citibank,
Washington  Mutual and Wells Fargo,  as well as smaller  community  banks in the
markets in which we operate.

     COMMERCIAL FINANCIAL SERVICES GROUP

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

     In the first quarter of 2004, net income  increased  $13.8  million,  or 21
percent,  compared to the first  quarter of 2003.  In the first quarter of 2004,
net interest income increased $4.3 million, or 2 percent,  compared to the first
quarter of 2003,  partially  attributable  to the impact of  increasing  deposit
balances  and a lower  cost of funds  resulting  from the  lower  interest  rate
environment.  Excluding  higher income in the private  equity  portfolio of $5.1
million,  mainly related to higher net gains on private  capital  investments in
the first  quarter of 2004  compared to the first  quarter of 2003,  noninterest
income  increased  $6.6  million,  or 11 percent.  This 11 percent  increase was
mainly attributable to higher deposit-related service fees. In the first quarter
of 2004,  noninterest expense increased $5.9 million, or 6 percent,  compared to
the first quarter of 2003 due to higher  expenses to support  increased  product
sales  and  deposit  volume.  Credit  expense  decreased  $11.2  million  mainly
attributable  to a refinement  in the RAROC  allocation  of capital and expected
losses and lower loan balances year-over-year.

     The group's initiatives during 2004 continue to include expanding wholesale
deposit  activities and increasing  domestic trade  financing.  Loan  strategies
include  originating,  underwriting  and  syndicating  loans in core  competency
markets, such as the California  middle-market,  commercial real estate, energy,
entertainment,   equipment  leasing  and  commercial  finance.   The  Commercial
Financial Services Group provides strong processing services, including services
such as check  processing,  front-end item  processing,  cash vault services and
digital imaging.

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

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

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

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



                                       46
<PAGE>



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

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

     The Check  Clearing for the 21st Century Act (Check 21) was signed into law
on October 28, 2003, and will become  effective on October 28, 2004. Check 21 is
designed  to  foster  innovation  in the  payments  system  and to  enhance  its
efficiency by reducing some of the legal  impediments to check  truncation (that
is, the banking process by which  cancelled  original checks are not returned to
the customer with the customer's  regular bank  statement).  The law facilitates
check  truncation by creating a new  negotiable  instrument  called a substitute
check,  which would permit banks to truncate  original checks,  to process check
information electronically,  and to deliver substitute checks to banks that want
to  continue  receiving  paper  checks.  A  substitute  check  will be the legal
equivalent of the original check and will include all the information  contained
on the  original  check.  The law does not  require  banks to  accept  checks in
electronic  form nor does it require banks to use the new  authority  granted by
Check 21 to create substitute checks. The detailed  regulations  regarding Check
21 are still  pending.  In order to manage and control the changes  which may be
necessitated  by Check 21, we have  established a "Check 21  Initiative  Project
Management  Structure,"  composed of representatives  from many of our operating
and support units. The objective of this initiative is to allow us to prioritize
and allocate our resources and mitigate  risk to our ongoing  operations.  It is
not possible at this time to predict the long-term  financial impact of Check 21
on our business.

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

     INTERNATIONAL BANKING GROUP

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

     In the first  quarter of 2004,  net income  increased  $0.4  million,  or 8
percent,  compared to the first quarter of 2003.  Total revenue  increased  $1.6
million,  or 6 percent,  compared  to the first  quarter of 2003.  Net  interest
income decreased $1.2 million,  or 13 percent,  compared to the first quarter of
2003 mainly  attributable to the lower value of demand deposits and lower yields
on foreign  loans,  partly offset by increasing  deposit  balances.  Noninterest
income was $2.7 million, or 18 percent,  higher compared to the first quarter of
2003, primarily attributable to higher payment and trade activities. Noninterest
expense increased $0.7 million,  or 5 percent,  compared to the first quarter of
2003. In the first quarter of 2004,  credit expense of $0.6 million was slightly
higher compared to the first quarter of 2003. The International  Banking Group's
business  revolves around  short-term  trade financing,  mostly to banks,  which
provides service-related income, as well as significantly lower credit risk when
compared to other lending activities.

     The  group  has a long  history  of  providing  correspondent  banking  and
trade-related products and services to international financial institutions.  We
believe  the  group  continues  to  achieve  strong  customer


                                       47
<PAGE>


loyalty in the correspondent  banking market.  The International  Banking Group,
headquartered  in San Francisco,  also maintains  offices in Asia, Latin America
and Europe; 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. Income attributable to business with Bank clients is allocated, through
performance centers, to the business units. Another primary area of the group is
treasury  management  for the  Company,  which  encompasses  wholesale  funding,
liquidity  management,  interest  rate  risk  management,  including  securities
portfolio management,  and hedging activities.  The Global Markets Group results
include the transfer pricing activity for the Bank, which allocates to the other
business  segments  their  cost of funds on all asset  categories  or credit for
funds in the case of all liability categories.

     In the first  quarter of 2004,  net loss was $2.3  million  compared to net
income of $11.2 million in the first quarter of 2003. Total revenue in the first
quarter of 2004  decreased by $19.9  million,  compared to the first  quarter of
2003,  resulting  from a $19.9  million  decrease in net  interest  income.  The
decrease in net interest income was primarily  attributable to a higher transfer
pricing  residual  in the first  quarter of 2004  resulting  from  significantly
higher  year-over-year  growth  in  deposits,  which are  priced on  longer-term
liability  rates,  compared  to credits on earning  assets,  which are priced on
shorter-term  lending rates.  Noninterest  income of $1.5 million was relatively
flat  compared to the first  quarter of 2003.  Noninterest  expense in the first
quarter of 2004  increased  $1.9 million,  or 43 percent,  compared to the first
quarter of 2003,  mainly  attributable to the  ineffectiveness  on our cash flow
hedges, which is recognized in noninterest expense.

     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 the results of operations of certain parent
          company  non-bank  subsidiaries  and  the  elimination  of  the  fully
          taxable-equivalent basis amount;

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

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

     o    the Pacific Rim Corporate Group,  with assets of $283 million at March
          31, 2004,  which  offers a range of credit,  deposit,  and  investment
          management  products and services to companies in the U.S.,  which are
          affiliated with companies headquartered in Japan; and

     o    the residual costs of support groups.

     Net income for "Other" in 2004 was $30.0 million. The results were impacted
by the following factors:

     o    Credit expense  (income) of ($44.7)  million was due to the difference
          between the $5.0  million  reversal  of  provision  for credit  losses
          calculated  under our U.S. GAAP  methodology  and the $39.7 million in
          expected losses for the reportable  business segments,  which utilizes
          the RAROC methodology;


                                       48
<PAGE>



     o    Net  interest  income  of  $25.3  million,  which  resulted  from  the
          differences  between the credit for equity for the reportable segments
          under  RAROC  and  the  net  interest  income  earned  by  UnionBanCal
          Corporation,  and a credit for  deposits in the Pacific Rim  Corporate
          Group;

     o    Noninterest income of $5.2 million; and

     o    Noninterest expense of $27.4 million.

     Net income for "Other" in 2003 was $15.3 million. The results were impacted
by the following factors:

     o    Credit expense  (income) of ($20.7)  million was due to the difference
          between the $30.0 million in provision  for credit  losses  calculated
          under our U.S.  GAAP  methodology  and the $50.7  million in  expected
          losses for the reportable business segments,  which utilizes the RAROC
          methodology; offset by

     o    Net  interest  income  of  $13.6  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 $9.2 million; and

     o    Noninterest expense of $24.5 million.

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 decline in the  technology
sector, the California state government's  budgetary difficulties and continuing
fiscal difficulties.  We have various banking  relationships with the California
State government,  including credit and deposit relationships and funds transfer
arrangements.  If economic  conditions in California decline, we expect that our
level of problem  assets could  increase and our  prospects  for growth could be
impaired.  On March 2, 2004, the California  electorate  approved certain ballot
measures, including a one-time economic recovery bond issue of up to $15 billion
to pay off the State's  accumulated  general fund deficit.  While these measures
are  expected  to provide  near-term  relief for the State  government's  fiscal
situation,  the State of  California  continues to face fiscal  challenges,  the
long-term impact of which, on the State's economy,  cannot be predicted with any
certainty.

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

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

     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.  We
provide  financing to  businesses  in a number of other  industries  that may be
particularly  vulnerable to  industry-specific  economic factors,  including the
communications / media industry,  the retail industry, the airline industry, the
power  industry and the  technology  industry.  Recent  increases in fuel prices
could   adversely   affect   businesses   in   several   of  these   industries.
Industry-specific  risks are beyond our control and could


                                       49
<PAGE>


adversely affect our portfolio of loans, potentially resulting in an increase in
nonperforming loans or charge-offs.

     FLUCTUATIONS IN INTEREST RATES COULD ADVERSELY AFFECT OUR BUSINESS

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

     FLUCTUATIONS IN INTEREST RATES COULD ADVERSELY AFFECT OUR MARGIN SPREAD

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

     STOCKHOLDER  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  62  percent  as of  March  31,  2004)  of the
outstanding  shares of our common stock.  As a result,  BTM can elect all of our
directors and 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
stockholders;   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  independent of BTM and 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
designate us as a "controlled  company"  under the New York Stock Exchange Rules
and could  change the  composition  of our Board of  Directors so that the Board
would not have a majority of independent directors.  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 stockholder.

     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


                                       50
<PAGE>


also subject to  regulatory  oversight  and review by Japanese and US regulatory
authorities.  Our business  operations  and expansion  plans could be negatively
affected by regulatory  concerns  related to the Japanese  financial  system and
BTM.

     POTENTIAL CONFLICTS OF INTEREST WITH BTM COULD ADVERSELY AFFECT US

     BTM's  view  of  possible   new   businesses,   strategies,   acquisitions,
divestitures or other initiatives may differ from ours. This may delay or hinder
us from pursuing such initiatives.

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

     Certain directors' and officers'  ownership interests in BTM's common stock
or service as a director  or officer or other  employee of both us and BTM could
create or appear to create  potential  conflicts of interest,  especially  since
both of us compete in the U.S. 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  nonfinancial  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 that have substantial capital,  technology and marketing resources.
Such large financial  institutions may have greater access to capital at a lower
cost than us, which may adversely affect our ability to compete effectively.

     Banks,  securities  firms,  and  insurance  companies  can now combine as a
"financial holding company." Financial holding companies can offer virtually any
type of financial service, including banking, securities underwriting, insurance
(both agency and  underwriting),  and merchant  banking.  Recently,  a number of
foreign banks have acquired  financial  services  companies in the U.S., further
increasing competition in the U.S. 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


                                       51
<PAGE>


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  U.S.   corporate   bankruptcies  and  reports  of  accounting
irregularities  at U.S. public  companies,  including various large and publicly
traded companies.  Additionally,  our international activities may be subject to
the laws and regulations of the jurisdiction  where business is being conducted.
International  laws,  regulations and policies affecting us and our subsidiaries
may change at any time and affect our business opportunities and competitiveness
in  these  jurisdictions.  Due to  BTM's  controlling  ownership  of  us,  laws,
regulations  and  policies  adopted or enforced by the  Government  of Japan may
adversely affect our activities and investments and those of our subsidiaries in
the future.

     Additionally,  our  business  is affected  significantly  by the fiscal and
monetary  policies  of  the  federal   government  and  its  agencies.   We  are
particularly  affected by the policies of the Federal Reserve Board (FRB), which
regulates the supply of money and credit in the U.S. 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 U.S. government securities,  (b) changing the discount rates of borrowings by
depository  institutions,  and (c)  imposing  or changing  reserve  requirements
against certain borrowings by banks and their affiliates. These methods are used
in varying degrees and  combinations to directly affect the availability of bank
loans and deposits,  as well as the interest  rates charged on loans and paid on
deposits.  The policies of the FRB may have a material  effect on our  business,
results of operations and financial condition.

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

     We may seek to acquire or invest in  companies,  technologies,  services or
products that complement our business. There can be no assurance that we will be
successful in completing any such  acquisition or investment as this will depend
on the availability of prospective  target companies at valuation levels we find
attractive and the competition  for such  opportunities  from other bidders.  In
addition,  we continue to evaluate the  performance of all of our businesses and
business  lines and may sell a business  or  business  line.  Any  acquisitions,
divestitures or restructuring may result in the issuance of potentially dilutive
equity securities,  significant write-offs,  including those related to goodwill
and other intangible  assets,  and/or the incurrence of debt, any of which could
have a material adverse effect on our business,  financial condition and results
of  operations.  Acquisitions,   divestitures  or  restructuring  could  involve
numerous  additional  risks  including  difficulties  in obtaining  any required
regulatory  approvals  and in the  assimilation  or  separation  of  operations,
services,  products and personnel,  the diversion of management's attention from
other  business  concerns,  higher than expected  deposit  attrition  (run-off),
divestitures required by regulatory authorities, the disruption of our business,
and the potential loss of key employees.  There can be no assurance that we will
be successful in overcoming these or any other significant risks encountered.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     A complete explanation  concerning our market risk exposure is incorporated
herein by  reference  to Part I,  Item 2 of this  document  under  the  captions
"Quantitative  and Qualitative  Disclosure About Market Risk," "Liquidity Risk,"
and "Certain Business Risk Factors."






                                       52

<PAGE>


ITEM 4. CONTROLS AND PROCEDURES

     Our  Chief  Executive  Officer  (principal  executive  officer)  and  Chief
Financial Officer  (principal  financial officer) have concluded that the design
and  operation of our  disclosure  controls and  procedures  are effective as of
March 31, 2004.  This  conclusion is based on an evaluation  conducted under the
supervision and with the  participation of management.  Disclosure  controls and
procedures  are those  controls and  procedures  which  ensure that  information
required to be  disclosed  in this filing is  accumulated  and  communicated  to
management  and is  recorded,  processed,  summarized  and  reported in a timely
manner and in  accordance  with  Securities  and Exchange  Commission  rules and
regulations.

     During  the  quarter  ended  March 31,  2004,  there were no changes in our
internal  controls over financial  reporting that  materially  affected,  or are
reasonably  likely to materially  affect,  our internal  controls over financial
reporting.































                                       53
<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,  N.A., our major subsidiary (the Bank), was 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
Herrington  &  Sutcliffe,  et al.  (filed  April 22,  2003 as to the Bank).  The
plaintiffs in these suits collectively  sought in excess of $250 million,  which
is 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 were various
investors in the  arrangements  conducted by Mr. Slatkin,  and the plaintiffs in
the Neilson  case  included  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 was an
individual  investor  who sought  recovery  of funds  placed in an account for a
limited liability company that he formed with Mr. Slatkin.  The Christensen case
has been dismissed and the Kilpatrick case has been settled for $2.1 million.

     Another suit,  Grafton Partners LP v. Union Bank of California,  is pending
in Alameda County  Superior Court (filed March 12, 2003).  That suit concerns an
unrelated  "Ponzi" scheme  perpetrated by PinnFund,  USA,  located in San Diego,
California.  The victims of this scheme seek $235  million  from the Bank.  They
assert that the Bank improperly opened and administered a deposit account, which
was used by PinnFund in furtherance of the fraud.

     The Bank has  numerous  legal  defenses to the  Grafton and Neilson  cases.
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 2. CHANGES IN  SECURITIES,  USE OF PROCEEDS AND ISSUER  PURCHASES OF EQUITY
        SECURITIES

     Repurchases of equity securities are presented in the table below.

<TABLE>
<CAPTION>

                                                                           TOTAL NUMBER OF            MAXIMUM NUMBER
                                                                          SHARES (OR UNITS)   (OR APPROXIMATE DOLLAR VALUE)
                               TOTAL NUMBER OF       AVERAGE PRICE      PURCHASED AS PART OF       OF SHARES (OR UNITS)
                              SHARES (OR UNITS)     PAID PER SHARE       PUBLICLY ANNOUNCED     THAT MAY YET BE PURCHASED
PERIOD                            PURCHASED            (OR UNIT)          PLANS OR PROGRAMS    UNDER THE PLANS OR PROGRAMS
----------------------------- -----------------   -------------------   --------------------  -----------------------------
<S>                                <C>                 <C>                     <C>                  <C>
JANUARY 2004
(January 26 - 30, 2004)......      150,000             $53.31747               150,000              $93,812,190.59
FEBRUARY 2004
(February 2 - 26, 2004)......      449,700              52.97409               449,700              $69,989,741.10
MARCH 2004
(March 1 - 17, 2004).........      230,000              53.15495               230,000              $57,764,103.60
                              -----------------                         --------------------
TOTAL........................      829,700             $53.08631               829,700
                              =================                         ====================

</TABLE>


                                       54
<PAGE>


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 Stockholders on April 28, 2004 ("Annual Meeting"):

     ELECTION  OF  DIRECTORS:  Each of the  following  persons  was elected as a
director to hold office until the 2005 Annual Meeting of  Stockholders  or until
earlier retirement, resignation or removal.

<TABLE>
<CAPTION>

NOMINEE                                  FOR            WITHHELD
-------------------------------      -----------       ----------
<S>                                  <C>                  <C>
David R. Andrews...............      142,309,449          422,108
L. Dale Crandall...............      141,421,540        1,310,016
Richard D. Farman..............      140,775,746        1,955,811
Stanley F. Farrar..............      142,280,987          450,570
Philip B. Flynn................      141,409,821        1,321,735
Michael J. Gillfillan..........      141,352,945        1,378,612
Richard C. Hartnack............      141,342,459        1,389,097
Norimichi Kanari...............      141,412,567        1,318,990
Satoru Kishi...................      115,141,713       27,589,844
Monica C. Lozano...............      142,280,182          451,375
Mary S. Metz...................      140,643,478        2,088,079
Takahiro Moriguchi.............      122,427,574       20,303,983
J. Fernando Niebla.............      141,373,521        1,358,035
Takaharu Saegusa...............      141,404,716        1,326,840
Tetsuo Shimura.................      141,389,675        1,341,882

</TABLE>

     PROPOSAL TO AMEND THE 1997 UNIONBANCAL  CORPORATION PERFORMANCE SHARE PLAN:
Proposal No. 2 to amend the Performance  Share Plan (a) to increase by 2,000,000
the  aggregate  number of  performance  shares  subject to the Plan,  and (b) to
permit the Executive  Compensation & Benefits Committee,  in its discretion,  to
provide for the payment of earned  awards in cash and/or  shares of  UnionBanCal
Corporation  common  stock issued  under the Year 2000  UnionBanCal  Corporation
Management Stock Plan received the following votes:


          For:                                    125,665,337
          Against:                                 16,714,752
          Abstain:                                    351,467


     RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS: Proposal No. 3 to ratify
the  selection by the Audit  Committee  of Deloitte & Touche LLP as  independent
auditors of UnionBanCal Corporation in 2004 received the following votes:


          For:                                    141,382,287
          Against:                                  1,280,443
          Abstain:                                     68,826


     STOCKHOLDER PROPOSAL REGARDING CUMULATIVE VOTING: Proposal No. 4 to request
the Board of Directors to take steps necessary to provide for cumulative  voting
in the election of directors in future  annual  meetings  received the following
votes:


          For:                                     13,865,894
          Against:                                127,651,975
          Abstain:                                  1,213,687



                                       55
<PAGE>



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

(A)  EXHIBITS:


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

10.1      Philip B. Flynn Employment Agreement (Effective April 1, 2004)(1)

31.1      Certification  of  the  Chief  Executive   Officer  pursuant  to  Rule
          13a-14a/15d-14(a)  of the Exchange Act, as adopted pursuant to Section
          302 of the Sarbanes-Oxley Act of 2002(1)

31.2      Certification  of  the  Chief  Financial   Officer  pursuant  to  Rule
          13a-14a/15d-14(a)  of the Exchange Act, as adopted pursuant to Section
          302 of the Sarbanes-Oxley Act of 2002(1)

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

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

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

(1) Filed herewith


(B) REPORTS ON FORM 8-K

     We furnished a report on Form 8-K on January 22, 2004 reporting  under Item
12  thereof  that  UnionBanCal  Corporation  issued a press  release  concerning
earnings for the fourth quarter of 2003.

     We  furnished a report on Form 8-K/A on January 23,  2004  reporting  under
Item 12 thereof an amendment to our report  furnished on Form 8-K on January 22,
2004,  which  reported  that  UnionBanCal  Corporation  issued  a press  release
concerning  earnings for the fourth  quarter of 2003.  This amendment was solely
filed to reflect the  conformed  signature of David I. Matson,  Chief  Financial
Officer, which was inadvertently omitted.
















                                       56
<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 10, 2004














                                       57