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

                                    FORM 10-Q

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

                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2005

                         COMMISSION FILE NUMBER 1-15081

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

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

                              400 CALIFORNIA STREET
                      SAN FRANCISCO, CALIFORNIA 94104-1302
              (Address and zip code of principal executive offices)
                  Registrant's telephone number: (415) 765-2969

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

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

         Indicate by check mark whether registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act). Yes [ ]  No [X]

         Number of shares of Common Stock outstanding at October 31, 2005:
144,585,174


<PAGE>


                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
                                TABLE OF CONTENTS

                                                                           PAGE
                                                                          NUMBER
                                                                          ------
PART I
FINANCIAL INFORMATION
  Consolidated Financial Highlights.........................................  2
  Item 1. Financial Statements:
    Condensed Consolidated Statements of Income.............................  4
    Condensed Consolidated Balance Sheets...................................  5
    Condensed Consolidated Statements of Changes in Stockholders' Equity....  6
    Condensed Consolidated Statements of Cash Flows.........................  7
    Notes to Condensed Consolidated Financial Statements....................  8
  Item 2. Management's Discussion and Analysis of Financial Condition and
          Results of Operations:
    Introduction............................................................  27
    Executive Overview......................................................  27
    Discontinued Operations.................................................  28
    Critical Accounting Policies............................................  29
    Financial Performance...................................................  30
    Net Interest Income.....................................................  34
    Noninterest Income......................................................  37
    Noninterest Expense.....................................................  37
    Income Tax Expense......................................................  38
    Loans...................................................................  38
    Cross-Border Outstandings...............................................  40
    Reversal of Allowance for Credit Losses.................................  40
    Allowance for Credit Losses.............................................  40
    Nonperforming Assets....................................................  44
    Loans 90 Days or More Past Due and Still Accruing.......................  45
    Quantitative and Qualitative Disclosures About Market Risk..............  45
    Liquidity Risk..........................................................  48
    Regulatory Capital......................................................  48
    Business Segments.......................................................  49
    Regulatory Matters......................................................  57
    Factors That May Affect Future Results..................................  58
  Item 3. Quantitative and Qualitative Disclosures About Market Risk........  64
  Item 4. Controls and Procedures...........................................  64
PART II
OTHER INFORMATION
  Item 1. Legal Proceedings.................................................  65
  Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.......  65
  Item 6. Exhibits..........................................................  65
  Signatures................................................................  66


<PAGE>


<TABLE>
<CAPTION>


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

                                                                                           AS OF AND FOR THE
                                                                                           THREE MONTHS ENDED
                                                                                      SEPTEMBER 30,  SEPTEMBER 30,   PERCENT
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)                                             2004            2005       CHANGE
---------------------------------------------                                         -------------  -------------   ------
<S>                                                                                      <C>            <C>           <C>
RESULTS OF OPERATIONS:
  Net interest income(1)..........................................................          $407,590       $465,193    14.13%
  Reversal of allowance for loan losses...........................................           (10,939)       (15,000)    37.12
  Noninterest income..............................................................           197,120        212,188      7.64
  Noninterest expense(2)..........................................................           359,576        396,696     10.32
                                                                                         -----------    -----------
  Income before income taxes(1)...................................................           256,073        295,685     15.47
  Taxable-equivalent adjustment...................................................             1,012          1,051      3.85
  Income tax expense..............................................................            98,121         93,388     (4.82)
                                                                                         -----------    -----------
  Income from continuing operations...............................................           156,940        201,246     28.23
  Income (loss) from discontinued operations, net of taxes........................             6,498        (15,961)       nm
                                                                                         -----------    -----------
  Net income......................................................................          $163,438       $185,285    13.37%
                                                                                         ===========    ===========
PER COMMON SHARE:
  Basic earnings:
    From continuing operations....................................................             $1.06          $1.39     31.13%
    Net income....................................................................              1.11           1.28     15.32
  Diluted earnings:
    From continuing operations....................................................              1.04           1.36     30.77
    Net income....................................................................              1.09           1.26     15.60
  Dividends(3)....................................................................              0.36           0.41     13.89
  Book value (end of period)......................................................             28.04          30.07      7.24
  Common shares outstanding (end of period)(4)....................................       147,163,392    144,584,972     (1.75)
  Weighted average common shares outstanding--basic(4)............................       147,554,853    144,459,465     (2.10)
  Weighted average common shares outstanding--diluted(4)..........................       150,379,127    147,613,377     (1.84)
BALANCE SHEET (END OF PERIOD):
  Total assets(8).................................................................       $46,990,605    $51,298,842      9.17%
  Total loans.....................................................................        26,902,191     32,004,747     18.97
  Nonaccrual loans................................................................           178,840         34,980    (80.44)
  Nonperforming assets............................................................           189,447         37,507    (80.20)
  Total deposits..................................................................        37,203,790     41,648,355     11.95
  Medium and long-term debt.......................................................           820,460        806,353     (1.72)
  Junior subordinated debt........................................................            15,904         15,451     (2.85)
  Stockholders' equity............................................................         4,126,159      4,346,956      5.35
BALANCE SHEET (PERIOD AVERAGE):
  Total assets....................................................................       $43,472,704    $48,212,029     10.90%
  Total loans.....................................................................        26,301,914     32,177,816     22.34
  Earning assets..................................................................        39,402,003     43,371,177     10.07
  Total deposits..................................................................        35,937,713     40,293,528     12.12
  Stockholders' equity............................................................         4,067,953      4,275,122      5.09
FINANCIAL RATIOS:
  Return on average assets:(5)
    From continuing operations....................................................              1.44%          1.66%
    Net income....................................................................              1.50           1.52
  Return on average stockholders' equity:(5)
    From continuing operations....................................................             15.35          18.68
    Net income....................................................................             15.98          17.19
  Efficiency ratio(6).............................................................             59.46          59.07
  Net interest margin(1)..........................................................              4.13           4.27
  Dividend payout ratio...........................................................             33.96          29.50
  Tangible equity ratio...........................................................              8.03           7.57
  Tier 1 risk-based capital ratio(8)..............................................              9.99           8.88
  Total risk-based capital ratio(8)...............................................             12.52          10.86
  Leverage ratio(8)...............................................................              8.27           7.96
  Allowance for credit losses to total loans(7)...................................              1.79           1.39
  Allowance for credit losses to nonaccrual loans(7)..............................            269.31       1,272.29
  Net loans charged off (recovered) to average total loans(5).....................              0.11           0.20
  Nonperforming assets to total loans and foreclosed assets.......................              0.70           0.12
  Nonperforming assets to total assets(8).........................................              0.40           0.07
---------------
<FN>
(1)  Amounts are on a taxable-equivalent basis using the federal statutory tax
     rate of 35 percent.

(2)  At September 30, 2004 and 2005, there were no expenses related to the
     allowance for losses on off-balance sheet commitments.

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

(4)  Common shares outstanding reflect common shares issued less treasury
     shares.

(5)  Annualized.

(6)  The efficiency ratio is noninterest expense, excluding foreclosed asset
     expense (income) and the provision for losses on off-balance sheet
     commitments, as a percentage of net interest income (taxable-equivalent
     basis) and noninterest income.

(7)  The allowance for credit losses ratios include the allowance for losses on
     off-balance sheet commitments.

(8)  End of period total assets used in calculating these ratios include those
     of discontinued operations.
</FN>
</TABLE>


                                       2


<PAGE>


<TABLE>
<CAPTION>


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

                                                                                           AS OF AND FOR THE
                                                                                           NINE MONTHS ENDED
                                                                                      SEPTEMBER 30,  SEPTEMBER 30,   PERCENT
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)                                             2004            2005       CHANGE
---------------------------------------------                                         -------------  -------------   ------
<S>                                                                                      <C>            <C>           <C>
RESULTS OF OPERATIONS:
  Net interest income(1)..........................................................        $1,198,862     $1,361,638    13.58%
  Reversal of allowance for loan losses...........................................           (29,038)       (40,683)    40.10
  Noninterest income..............................................................           700,434        621,367    (11.29)
  Noninterest expense(2)..........................................................         1,084,751      1,178,048      8.60
                                                                                         -----------    -----------
  Income before income taxes(1)...................................................           843,583        845,640      0.24
  Taxable-equivalent adjustment...................................................             2,617          3,124     19.37
  Income tax expense..............................................................           308,989        274,041    (11.31)
                                                                                         -----------    -----------
  Income from continuing operations...............................................           531,977        568,475      6.86
  Income (loss) from discontinued operations, net of taxes........................            20,045        (14,031)       nm
                                                                                         -----------    -----------
  Net income......................................................................          $552,022       $554,444     0.44%
                                                                                         ===========    ===========
PER COMMON SHARE:
  Basic earnings:
    From continuing operations....................................................             $3.61          $3.91     8.31%
    Net income....................................................................              3.74           3.82      2.14
  Diluted earnings:
    From continuing operations....................................................              3.55           3.84      8.17
    Net income....................................................................              3.68           3.74      1.63
  Dividends(3)....................................................................              1.03           1.18     14.56
  Book value (end of period)......................................................             28.04          30.07      7.24
  Common shares outstanding (end of period)(4)....................................       147,163,392    144,584,972     (1.75)
  Weighted average common shares outstanding--basic(4)............................       147,547,527    145,325,640     (1.51)
  Weighted average common shares outstanding--diluted(4)..........................       150,026,647    148,062,139     (1.31)
BALANCE SHEET (END OF PERIOD):
  Total assets(8).................................................................       $46,990,605    $51,298,842      9.17%
  Total loans.....................................................................        26,902,191     32,004,747     18.97
  Nonaccrual loans................................................................           178,840         34,980    (80.44)
  Nonperforming assets............................................................           189,447         37,507    (80.20)
  Total deposits..................................................................        37,203,790     41,648,355     11.95
  Medium and long-term debt.......................................................           820,460        806,353     (1.72)
  Junior subordinated debt........................................................            15,904         15,451     (2.85)
  Stockholders' equity............................................................         4,126,159      4,346,956      5.35
BALANCE SHEET (PERIOD AVERAGE):
  Total assets....................................................................       $42,325,380    $47,342,684     11.85%
  Total loans.....................................................................        25,328,476     30,843,202     21.77
  Earning assets..................................................................        38,352,522     42,575,954     11.01
  Total deposits..................................................................        35,395,054     39,304,760     11.05
  Stockholders' equity............................................................         3,984,194      4,209,884      5.66
FINANCIAL RATIOS:
  Return on average assets:(5)
    From continuing operations....................................................              1.68%          1.61%
    Net income....................................................................              1.74           1.57
  Return on average stockholders' equity:(5)
    From continuing operations....................................................             17.84          18.05
    Net income....................................................................             18.51          17.61
  Efficiency ratio(6).............................................................             57.09          59.74
  Net interest margin(1)..........................................................              4.17           4.27
  Dividend payout ratio...........................................................             28.53          30.18
  Tangible equity ratio...........................................................              8.03           7.57
  Tier 1 risk-based capital ratio(8)..............................................              9.99           8.88
  Total risk-based capital ratio(8)...............................................             12.52          10.86
  Leverage ratio(8)...............................................................              8.27           7.96
  Allowance for credit losses to total loans(7)...................................              1.79           1.39
  Allowance for credit losses to nonaccrual loans(7)..............................            269.31       1,272.29
  Net loans charged off (recovered) to average total loans(5).....................              0.15          (0.02)
  Nonperforming assets to total loans and foreclosed assets.......................              0.70           0.12
  Nonperforming assets to total assets(8).........................................              0.40           0.07
---------------
<FN>
(1)  Amounts are on a taxable-equivalent basis using the federal statutory tax
     rate of 35 percent.

(2)  Included in noninterest expense at September 30, 2005 was a $1 million
     reversal of the allowance for losses on off-balance sheet commitments.

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

(4)  Common shares outstanding reflects common shares issued less treasury
     shares.

(5)  Annualized.

(6)  The efficiency ratio is noninterest expense, excluding foreclosed asset
     expense (income) and the provision for losses on off-balance sheet
     commitments, as a percentage of net interest income (taxable-equivalent
     basis) and noninterest income.

(7)  The allowance for credit losses ratios include the allowance for losses on
     off-balance sheet commitments.

(8)  End of period total assets used in calculating these ratios include those
     of discontinued operations.
</FN>
</TABLE>


                                       3


<PAGE>


ITEM 1. FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
         UnionBanCal Corporation and Subsidiaries Condensed Consolidated
         Statements of Income(1)(Unaudited)

                                                                                 FOR THE THREE MONTHS   FOR THE NINE MONTHS
                                                                                 ENDED SEPTEMBER 30,    ENDED SEPTEMBER 30,
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)                                        2004      2005       2004        2005
---------------------------------------------                                        ----      ----       ----        ----
<S>                                                                                <C>       <C>         <C>       <C>
INTEREST INCOME
  Loans.......................................................................     $341,532  $461,381    $991,081  $1,304,324
  Securities..................................................................      106,172    97,569     320,077     300,868
  Interest bearing deposits in banks..........................................        1,656       303       1,946       1,432
  Federal funds sold and securities purchased under resale agreements.........        1,616     6,777       6,503      14,406
  Trading account assets......................................................        1,140     1,062       2,558       2,902
                                                                                   --------  --------   ---------  ----------
    Total interest income.....................................................      452,116   567,092   1,322,165   1,623,932
                                                                                   --------  --------   ---------  ----------
INTEREST EXPENSE
  Domestic deposits...........................................................       34,725    78,983     100,193     197,801
  Foreign deposits............................................................          370     3,813         951       8,247
  Federal funds purchased and securities sold under repurchase agreements.....        3,013       294       3,540       9,330
  Commercial paper............................................................        1,697     9,394       3,883      21,761
  Medium and long-term debt...................................................        4,369     8,520      11,201      22,511
  Trust notes.................................................................          242       239       2,553         715
  Other borrowed funds........................................................        1,122     1,707       3,599       5,053
                                                                                   --------  --------   ---------  ----------
    Total interest expense....................................................       45,538   102,950     125,920     265,418
                                                                                   --------  --------   ---------  ----------
NET INTEREST INCOME...........................................................      406,578   464,142   1,196,245   1,358,514
  Reversal of allowance for loan losses(2)....................................      (10,939)  (15,000)    (29,038)    (40,683)
                                                                                   --------  --------   ---------  ----------
    Net interest income after reversal of allowance for loan losses...........      417,517   479,142   1,225,283   1,399,197
                                                                                   --------  --------   ---------  ----------
NONINTEREST INCOME
  Service charges on deposit accounts.........................................       85,667    84,822     252,974     243,835
  Trust and investment management fees........................................       39,089    43,500     111,699     127,053
  Insurance commissions.......................................................       17,463    17,819      57,850      59,176
  Merchant banking fees.......................................................       11,682    11,257      26,863      35,637
  Foreign exchange gains, net.................................................        8,268     8,849      24,209      25,570
  Brokerage commissions and fees..............................................        8,527     5,290      24,847      22,867
  Card processing fees, net...................................................        4,653     6,597      28,901      18,668
  Securities gains (losses), net..............................................           (6)     (320)      1,612     (13,289)
  Other.......................................................................       21,777    34,374     171,479     101,850
                                                                                   --------  --------   ---------  ----------
    Total noninterest income..................................................      197,120   212,188     700,434     621,367
                                                                                   --------  --------   ---------  ----------
NONINTEREST EXPENSE
  Salaries and employee benefits..............................................      209,554   236,124     632,463     701,858
  Net occupancy...............................................................       32,029    34,336      93,517     100,251
  Outside services............................................................       19,572    28,533      52,130      76,248
  Equipment...................................................................       15,949    15,832      49,370      50,176
  Software....................................................................       12,790    14,374      37,309      43,072
  Professional services.......................................................       11,976    11,240      33,410      36,131
  Communications..............................................................       10,234    10,808      31,728      30,950
  Foreclosed asset expense (income)...........................................          (10)   (3,435)        526      (5,606)
  Reversal of allowance for losses on off-balance sheet commitments(2)........           --        --          --      (1,000)
  Other.......................................................................       47,482    48,884     154,298     145,968
                                                                                   --------  --------   ---------  ----------
    Total noninterest expense.................................................      359,576   396,696   1,084,751   1,178,048
                                                                                   --------  --------   ---------  ----------
  Income from continuing operations before income taxes.......................      255,061   294,634     840,966     842,516
  Income tax expense..........................................................       98,121    93,388     308,989     274,041
                                                                                   --------  --------   ---------  ----------
INCOME FROM CONTINUING OPERATIONS.............................................      156,940   201,246     531,977     568,475
                                                                                   --------  --------   ---------  ----------
  Income (loss) from discontinued operations before income taxes..............       10,592   (25,612)     32,673     (22,385)
  Income tax expense (benefit)................................................        4,094    (9,651)     12,628      (8,354)
                                                                                   --------  --------   ---------  ----------
INCOME (LOSS) FROM DISCONTINUED OPERATIONS....................................        6,498   (15,961)     20,045     (14,031)
                                                                                   --------  --------   ---------  ----------
NET INCOME....................................................................     $163,438  $185,285    $552,022    $554,444
                                                                                   ========  ========   =========  ==========
INCOME FROM CONTINUING OPERATIONS PER COMMON SHARE--BASIC.....................        $1.06     $1.39       $3.61       $3.91
NET INCOME PER COMMON SHARE--BASIC............................................        $1.11     $1.28       $3.74       $3.82
                                                                                   ========  ========   =========  ==========
INCOME FROM CONTINUING OPERATIONS PER COMMON SHARE--DILUTED...................        $1.04     $1.36       $3.55       $3.84
NET INCOME PER COMMON SHARE--DILUTED..........................................        $1.09     $1.26       $3.68       $3.74
                                                                                   ========  ========   =========  ==========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING--BASIC.............................      147,555   144,459     147,548     145,326
                                                                                   ========  ========   =========  ==========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING--DILUTED...........................      150,379   147,613     150,027     148,062
                                                                                   ========  ========   =========  ==========
---------------
<FN>
(1)  In September 2005, Union Bank of California, N.A. committed to a plan for
     disposal of its international correspondent banking business. All periods
     presented have been restated to reflect the discontinued operations.

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

     See accompanying notes to condensed consolidated financial statements.


                                       4


<PAGE>


<TABLE>
<CAPTION>


                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS

                                                                                       (UNAUDITED)                (UNAUDITED)
                                                                                      SEPTEMBER 30, DECEMBER 31, SEPTEMBER 30,
(DOLLARS IN THOUSANDS)                                                                    2004          2004         2005
----------------------                                                                    ----          ----         ----
<S>                                                                                    <C>          <C>           <C>
ASSETS
Cash and due from banks...........................................................     $ 2,036,226  $ 1,977,033   $ 2,163,149
Interest bearing deposits in banks................................................         348,471      277,482       471,340
Federal funds sold and securities purchased under resale agreements...............       1,045,275      944,950     1,454,193
                                                                                       -----------  -----------   -----------
    Total cash and cash equivalents...............................................       3,429,972    3,199,465     4,088,682
Trading account assets............................................................         288,601      235,840       371,551
Securities available for sale:
  Securities pledged as collateral................................................         124,896      144,240       158,878
  Held in portfolio...............................................................      11,863,216   10,994,981     9,647,093
Loans (net of allowance for loan losses: September 30, 2004, $481,642; December 31,
  2004, $399,156; September 30, 2005, $363,671)(1)................................      26,420,549   28,710,259    31,641,076
Due from customers on acceptances.................................................          16,295       23,841        47,167
Premises and equipment, net.......................................................         497,899      526,543       509,922
Intangible assets.................................................................          60,977       61,737        46,781
Goodwill..........................................................................         320,835      450,961       452,617
Other assets......................................................................       1,768,710    1,731,354     2,318,507
Assets of discontinued operations to be disposed or sold(2).......................       2,198,655    2,018,800     2,016,568
                                                                                       -----------  -----------   -----------
    Total assets..................................................................     $46,990,605  $48,098,021   $51,298,842
                                                                                       ===========  ===========   ===========
LIABILITIES
Domestic deposits:
  Noninterest bearing.............................................................     $18,903,588  $19,100,128   $20,541,706
  Interest bearing................................................................      17,838,599   19,402,379    20,475,166
Foreign deposits:
  Interest bearing................................................................         461,603      216,999       631,483
                                                                                       -----------  -----------   -----------
    Total deposits................................................................      37,203,790   38,719,506    41,648,355
Federal funds purchased and securities sold under repurchase agreements...........         648,864      587,249       357,725
Commercial paper..................................................................         615,816      824,887       859,515
Other borrowed funds..............................................................         150,503      172,549       114,324
Acceptances outstanding...........................................................          16,295       23,841        47,167
Other liabilities(1)..............................................................       1,173,988    1,112,743     1,616,174
Medium and long-term debt.........................................................         820,460      816,113       806,353
Junior subordinated debt payable to subsidiary grantor trust......................          15,904       15,790        15,451
Liabilities of discontinued operations to be extinguished or assumed(2)...........       2,218,826    1,533,099     1,486,822
                                                                                       -----------  -----------   -----------
    Total liabilities.............................................................      42,864,446   43,805,777    46,951,886
                                                                                       -----------  -----------   -----------
Commitments and contingencies--See Note 10
STOCKHOLDERS' EQUITY
Preferred stock:
  Authorized 5,000,000 shares, no shares issued or outstanding as of September 30,
    2004, December 31, 2004, and September 30, 2005...............................              --           --            --
Common stock, par value $1 per share at September 30, 2004, December 31, 2004 and
  September 30, 2005:
Authorized 300,000,000 shares, issued 149,529,292 shares as of September 30,
  2004, 152,191,818 shares as of December 31, 2004, and 153,960,915 shares as of
  September 30, 2005                                                                       149,529      152,192       153,961
Additional paid-in capital........................................................         728,791      881,928       967,242
Treasury stock--2,365,900 shares as of September 30, 2004, 3,831,900 shares as of
  December 31, 2004 and 9,375,943 shares as of September 30, 2005.................        (131,464)    (223,361)     (552,786)
Retained earnings.................................................................       3,400,117    3,526,312     3,901,625
Accumulated other comprehensive loss..............................................         (20,814)     (44,827)     (123,086)
                                                                                       -----------  -----------   -----------
    Total stockholders' equity....................................................       4,126,159    4,292,244     4,346,956
                                                                                       -----------  -----------   -----------
    Total liabilities and stockholders' equity....................................     $46,990,605  $48,098,021   $51,298,842
                                                                                       ===========  ===========   ===========
---------------
<FN>
(1)  On December 31, 2004, UnionBanCal Corporation transferred the allowance
     related to losses on off-balance sheet commitments of $83 million from the
     allowance for loan losses to other liabilities. At September 30, 2005, the
     allowance related to losses on off-balance sheet commitments was $82
     million. Periods prior to December 31, 2004 have not been restated.

(2)  In September 2005, Union Bank of California, N.A. committed to a plan for
     disposal of its international correspondent banking business. All prior
     periods presented have been restated to reflect the discontinued
     operations.
</FN>
</TABLE>

     See accompanying notes to condensed consolidated financial statements.


                                       5


<PAGE>


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

                                                                                                     ACCUMULATED
                                                                   ADDITIONAL                           OTHER        TOTAL
                                                NUMBER     COMMON    PAID-IN   TREASURY   RETAINED   COMPREHENSIVE STOCKHOLDERS'
(IN THOUSANDS, EXCEPT SHARES)                 OF SHARES     STOCK    CAPITAL    STOCK     EARNINGS   INCOME (LOSS)   EQUITY
-----------------------------                 ---------     -----    -------    -----     --------   -------------   ------
<S>                                          <C>          <C>       <C>       <C>        <C>             <C>       <C>
BALANCE DECEMBER 31, 2003.................   146,000,156  $146,000  $555,156 $ (12,846)  $2,999,884     $  52,242  $3,740,436
                                                          --------  -------- ---------   ----------     ---------  ----------
Comprehensive income
  Net income--For the nine months ended
    September 30, 2004....................                                                  552,022                   552,022
  Other comprehensive income, net of tax:
    Net change in unrealized gains on cash
      flow hedges.........................                                                                (30,285)    (30,285)
    Net change in unrealized losses on
      securities available for sale.......                                                                (43,404)    (43,404)
    Foreign currency translation adjustment                                                                   633         633
                                                                                                                   ----------
Total comprehensive income................                                                                            478,966
Dividend reinvestment plan................           308                  17                                               17
Deferred compensation--restricted stock
  awards..................................                                                      185                       185
Stock options exercised...................     1,520,109     1,520    61,223                                           62,743
Stock issued in acquisitions..............     2,008,719     2,009   112,569                                          114,578
Common stock repurchased(1)...............                             (174)  (118,618)                              (118,792)
Dividends declared on common stock, $1.03
  per share(2)............................                                                 (151,974)                 (151,974)
                                                          --------  -------- ---------   ----------     ---------  ----------
Net change................................                   3,529   173,635  (118,618)     400,233       (73,056)    385,723
                                             -----------  --------  -------- ---------   ----------     ---------  ----------
BALANCE SEPTEMBER 30, 2004................   149,529,292  $149,529  $728,791 $(131,464)  $3,400,117     $ (20,814) $4,126,159
                                             ===========  ========  ======== =========   ==========     =========  ==========
BALANCE DECEMBER 31, 2004.................   152,191,818  $152,192  $881,928 $(223,361)  $3,526,312     $ (44,827) $4,292,244
                                                          --------  -------- ---------   ----------     ---------  ----------
Comprehensive income
  Net income--For the nine months ended
    September 30, 2005....................                                                  554,444                   554,444
  Other comprehensive income, net of tax:
    Net change in unrealized losses on
      cash flow hedges....................                                                                (29,476)    (29,476)
    Net change in unrealized losses on
      securities available for sale.......                                                                (48,846)    (48,846)
    Foreign currency translation adjustment                                                                    79          79
    Minimum pension liability adjustment..                                                                    (16)        (16)
                                                                                                                   ----------
Total comprehensive income................                                                                            476,185
Dividend reinvestment plan................                                                                                 --
Deferred compensation--restricted stock
  awards..................................       215,363       215    12,956                 (8,461)                    4,710
Stock options exercised...................     1,553,734     1,554    72,358                                           73,912
Common stock repurchased(1)...............                                    (329,425)                              (329,425)
Dividends declared on common stock, $1.18
  per share(2)............................                                                 (170,670)                 (170,670)
                                                          --------  -------- ---------   ----------     ---------  ----------
Net change................................                   1,769    85,314  (329,425)     375,313       (78,259)     54,712
                                             -----------  --------  -------- ---------   ----------     ---------  ----------
BALANCE SEPTEMBER 30, 2005................   153,960,915  $153,961  $967,242 $(552,786)  $3,901,625     $(123,086) $4,346,956
                                             ===========  ========  ======== =========   ==========     =========  ==========
---------------
<FN>
(1)  Common stock repurchased includes commission costs.

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

     See accompanying notes to condensed consolidated financial statements.


                                       6


<PAGE>


<TABLE>
<CAPTION>

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

                                                                                                        FOR THE NINE MONTHS
                                                                                                        ENDED SEPTEMBER 30,
(DOLLARS IN THOUSANDS)                                                                                    2004       2005
----------------------                                                                                    ----       ----
<S>                                                                                                    <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income........................................................................................   $  552,022  $  554,444
    Income (loss) from discontinued operations, net of taxes........................................       20,045     (14,031)
                                                                                                       ----------  ----------
    Income from continuing operations, net of taxes.................................................      531,977     568,475
  Adjustments to reconcile income from continuing operations to net cash
    provided by (used in) operating activities:
    Reversal of allowance for loan losses...........................................................      (29,038)    (40,683)
    Reversal of allowance for losses on off-balance sheet commitments...............................           --      (1,000)
    Depreciation, amortization and accretion........................................................       99,361      97,815
    Provision for deferred income taxes.............................................................       29,411      71,328
    Losses (gains) on securities available for sale.................................................       (1,612)     13,289
    Net increase in prepaid expenses................................................................      (96,002)   (191,791)
    Net (increase) decrease in fees and other charges receivable....................................        4,069    (130,382)
    Net increase (decrease) in accrued expenses.....................................................       22,905       4,709
    Net increase (decrease) in unearned and deferred income.........................................       (2,557)    134,111
    Net increase (decrease) in other liabilities....................................................      204,546     289,340
    Net (increase) decrease in other assets, net of acquisitions....................................      182,905    (276,735)
    Net (increase) decrease in trading account assets...............................................      (36,580)   (135,711)
    Loans originated for resale.....................................................................     (661,342)    (90,238)
    Net proceeds from sale of loans originated for resale...........................................      518,739     200,637
    Other, net......................................................................................       15,281     (16,484)
    Discontinued operations, net....................................................................      (62,352)      1,349
                                                                                                       ----------  ----------
    Total adjustments...............................................................................      187,734     (70,446)
                                                                                                       ----------  ----------
  Net cash provided by (used in) operating activities...............................................      719,711     498,029
                                                                                                       ----------  ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Proceeds from sales of securities available for sale..............................................       13,479     506,070
  Proceeds from matured and called securities available for sale....................................    3,170,560   1,753,484
  Purchases of securities available for sale, net of acquisitions...................................   (4,380,888) (1,036,810)
  Net (increase) decrease in loans, net of acquisitions.............................................   (1,996,067) (2,984,426)
  Net cash provided by (paid in) acquisitions.......................................................       28,086          --
  Other, net........................................................................................      (55,962)    (47,776)
  Discontinued operations, net......................................................................     (155,348)      9,794
                                                                                                       ----------  ----------
    Net cash provided by (used in) investing activities.............................................   (3,376,140) (1,799,664)
                                                                                                       ----------  ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Net increase (decrease) in deposits, net of acquisitions..........................................    2,512,609   2,928,849
  Net increase (decrease) in federal funds purchased and securities sold under repurchase agreements      367,896    (229,524)
  Net increase (decrease) in commercial paper and other borrowed funds..............................       11,961     (23,597)
  Repayment of junior subordinated debt.............................................................     (360,825)         --
  Common stock repurchased..........................................................................     (118,792)   (329,425)
  Payments of cash dividends........................................................................     (144,146)   (164,946)
  Other, net........................................................................................       63,578      78,701
  Discontinued operations, net......................................................................      553,962     (69,219)
                                                                                                       ----------  ----------
    Net cash provided by (used in) financing activities.............................................    2,886,243   2,190,839
                                                                                                       ----------  ----------
Net increase (decrease) in cash and cash equivalents from continuing operations.....................      229,814     889,204
Cash and cash equivalents of continuing operations at beginning of period...........................    3,200,158   3,199,465
Effect of exchange rate changes on cash and cash equivalents........................................           --          13
                                                                                                       ----------  ----------
Cash and cash equivalents at end of period..........................................................   $3,429,972  $4,088,682
                                                                                                       ==========  ==========
CASH PAID DURING THE PERIOD FOR:
  Interest..........................................................................................   $  122,236  $  226,584
  Income taxes......................................................................................      230,094     158,089
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
  Acquisitions:
    Fair value of assets acquired...................................................................   $  991,887  $       --
    Purchase price:
      Cash..........................................................................................      (33,772)         --
      Stock issued..................................................................................     (114,578)         --
                                                                                                       ----------  ----------
    Liabilities assumed.............................................................................   $  843,537  $       --
                                                                                                       ==========  ==========
  Loans transferred to foreclosed assets (OREO).....................................................   $    6,723  $       --
</TABLE>

See accompanying notes to condensed consolidated financial statements.


                                       7


<PAGE>


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

NOTE 1--BASIS OF PRESENTATION AND NATURE OF OPERATIONS

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

         UnionBanCal Corporation is a commercial bank holding company and has,
as its major subsidiary, a banking subsidiary, Union Bank of California, N.A.
(the Bank). The Company provides a wide range of financial services to
consumers, small businesses, middle-market companies and major corporations,
primarily in California, Oregon, and Washington, but also nationally. Upon
completion of the exit from the international correspondent banking business
(see Note 3 "Discontinued Operations" of this quarterly report on Form 10-Q),
the Bank will continue to provide trade finance and other international
financial services (but not international correspondent banking) to customers.

         Under previously announced stock repurchase plans, the Company was
authorized to repurchase $162 million of the Company's common stock as of
September 30, 2005. The Company repurchased $210 million, $40 million and $89
million of common stock in 2004, the first quarter of 2005 and the second
quarter of 2005, respectively, as part of these repurchase plans (excluding
commission costs). There were no repurchases of common stock in the third
quarter of 2005. Under a separate stock repurchase agreement, the Company
repurchased $200 million of its common stock in February 2005, from its majority
owner, The Bank of Tokyo-Mitsubishi, Ltd. (BTM), which is a wholly-owned
subsidiary of Mitsubishi UFJ Financial Group, Inc. At September 30, 2005, BTM
owned approximately 61 percent of the Company's outstanding common stock.

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

STOCK-BASED COMPENSATION

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


                                       8


<PAGE>


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


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


         At September 30, 2005, the Company had two stock-based employee
compensation plans. For further discussion concerning the Company's stock-based
employee compensation plans see Note 15 of the Notes to Consolidated Financial
Statements included in the Annual Report on Form 10-K for the year ended
December 31, 2004. The value of the restricted stock awards issued under the
plans has been reflected in compensation expense. Options granted under the
plans had an exercise price equal to the market value of the underlying common
stock on the date of grant and, therefore, were not included in compensation
expense as allowed by current US GAAP.

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

<TABLE>
<CAPTION>

                                                                                   FOR THE THREE MONTHS  FOR THE NINE MONTHS
                                                                                    ENDED SEPTEMBER 30,  ENDED SEPTEMBER 30,
(DOLLARS IN THOUSANDS)                                                                2004       2005      2004       2005
----------------------                                                                ----       ----      ----       ----
<S>                                                                                  <C>        <C>       <C>        <C>
AS REPORTED NET INCOME...........................................................    $163,438   $185,285  $552,022   $554,444
Add: stock-based employee compensation expense included in reported net income,
  net of income taxes............................................................          34      1,274       114      2,908
Deduct: total stock-based employee compensation expense, net of income taxes.....       6,744      6,086    20,039     18,445
                                                                                     --------   --------  --------   --------
Pro forma net income, after stock-based employee compensation expense............    $156,728   $180,473  $532,097   $538,907
                                                                                     ========   ========  ========   ========
NET INCOME PER COMMON SHARE--BASIC
    As reported..................................................................       $1.11      $1.28     $3.74      $3.82
    Pro forma....................................................................       $1.06      $1.25     $3.61      $3.71
NET INCOME PER COMMON SHARE--DILUTED
    As reported..................................................................       $1.09      $1.26     $3.68      $3.74
    Pro forma....................................................................       $1.04      $1.23     $3.55      $3.66

</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 cost for unvested stock option awards is based upon the fair value
method.

NOTE 2--RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

ACCOUNTING FOR EMPLOYERS'  DISCLOSURES  ABOUT PENSIONS AND OTHER  POSTRETIREMENT
BENEFITS

         In December 2003, the Financial Accounting Standards Board (FASB)
issued SFAS No. 132R, a revision of SFAS No. 132, "Employers' Disclosures about
Pensions and Other Postretirement Benefits, an amendment of FASB Statements No.
87, 88, and 106." The Statement expands the disclosure requirements of SFAS No.
132 to include information describing types of plan assets, investment strategy,
measurement date(s), plan obligations, cash flows, and components of net
periodic benefit costs of defined pension plans


                                       9


<PAGE>


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


NOTE 2--RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (CONTINUED)

and other defined benefit postretirement plans. The Statement was effective for
financial statements with fiscal years ending after December 15, 2003, with
additional disclosure of expected benefits to be paid in each of the next five
years and in the aggregate for the five years thereafter required for fiscal
years ending after June 15, 2004. The disclosures required under SFAS No. 132R
are contained in Note 11 of these condensed consolidated financial statements.

         ACCOUNTING FOR SHARE-BASED PAYMENTS

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

         EXCHANGES OF NONMONETARY ASSETS

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

         ACCOUNTING CHANGES AND ERROR CORRECTIONS

         In May 2005, the FASB issued SFAS No. 154, "Accounting Changes and
Error Corrections, a replacement of APB Opinion No. 20 and FASB Statement No.
3." The Statement requires that a voluntary change in accounting principle be
applied retrospectively to all prior period financial statements presented,
unless impracticable to do so. It also provides that a change in method of
depreciation or amortization for long-lived nonfinancial assets be accounted for
as a change in accounting estimate effected by a change in accounting principle,
with the change applied prospectively and that correction of errors in
previously issued financial statements should be termed a "restatement." The
Statement is effective for fiscal years


                                       10


<PAGE>


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


NOTE 2--RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (CONTINUED)

beginning after December 15, 2005. Management believes that adopting this
Statement will not have a material impact on the Company's financial position or
results of operations.

         CONSOLIDATION OF VARIABLE INTEREST ENTITIES

         In January 2003, the FASB issued Interpretation No. 46 (FIN 46),
"Consolidation of Variable Interest Entities." FIN 46 provides guidance on how
to identify a variable interest entity (VIE), and when the assets, liabilities,
noncontrolling interests and results of operations of a VIE need to be included
in a company's consolidated financial statements. A VIE exists when either the
total equity investment at risk is not sufficient to permit the entity to
finance its activities by itself, or the equity investors lack a controlling
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-SPEs (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 SPEs
must apply either the provisions of FIN 46 or early adopt the provisions of FIN
46R by the first reporting period ending after December 15, 2003. The adoption
of FIN 46R on January 1, 2004 did not have a material impact on the Company's
financial position or results of operations.

         ACCOUNTING FOR CERTAIN LOANS ACQUIRED IN A TRANSFER

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

         DETERMINING WHETHER A GENERAL PARTNER CONTROLS A LIMITED PARTNERSHIP

         In June 2005, the FASB ratified Emerging Issues Task Force (EITF) Issue
No. 04-5, "Determining Whether a General Partner, or the General Partners as a
Group, Controls a Limited Partnership or Similar Entity When the Limited
Partners Have Certain Rights." The EITF reached a consensus that the general
partners in a limited partnership are presumed to control that limited
partnership regardless of the extent of the general partners' ownership interest
in the limited partnership. The presumption of control by the general partner
can be overcome if the limited partners have either (a) the substantive ability
to dissolve the limited partnership or remove the general partners without cause
or (b) substantive participating


                                       11


<PAGE>


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


NOTE 2--RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (CONTINUED)

rights. The guidance is effective for all limited partnerships created or
modified after June 29, 2005 and for all existing limited partnerships beginning
January 1, 2006. Management believes that adopting this guidance will not have a
material impact on the Company's financial position or results of operations.

NOTE 3--DISCONTINUED OPERATIONS

         During the third quarter 2005, the Bank signed a definitive agreement
to sell its international correspondent banking operations (previously reported
as the International Banking Group for segment reporting) to Wachovia Bank, N.A.
effective October 6, 2005. Effective third quarter 2005, the Company is
accounting for this transaction as a discontinued operation and has restated all
of its prior period financial statements.

         The principal legal closing of the transaction took place on October 6,
2005, with the Bank receiving $245 million in cash from Wachovia Bank, N.A. The
Bank may also earn a contingent payment not to exceed $45 million, based on the
results of conversion of the international correspondent banking customer base
to Wachovia Bank, N.A. Any such contingent payment would be earned and received
in the second quarter of 2006.

         At the principal closing, no loans or other assets were acquired by
Wachovia Bank, N.A., and no liabilities were assumed. The Bank continues to
operate this international business, and will continue to do so over a
transition period of several months, during which it is expected that a majority
of the Bank's international correspondent banking customers will transfer to
Wachovia Bank, N.A. In conjunction with the customer conversion process during
the fourth quarter of 2005 and the first quarter of 2006, it is expected that
certain loans and other assets of the business will be acquired by Wachovia
Bank, N.A. and certain related liabilities may be assumed. Wachovia Bank, N.A.
will pay in cash to the Bank an amount equal to the net book value of assets
acquired less any liabilities assumed.

         The Bank expects to complete its exit from the international
correspondent banking business by the second quarter 2006. As customers are
transferred to Wachovia Bank, N.A. during the coming months, the Bank's
international correspondent banking revenue will decline. International
correspondent banking expenses will also decline, but not necessarily at the
same rate as revenue.


                                       12


<PAGE>


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


NOTE 3--DISCONTINUED OPERATIONS (CONTINUED)

         At September 30, 2005, the Bank recorded all assets related to the
discontinued operations at the lower of cost or fair value. The assets and
liabilities identified as discontinued operations were comprised of the
following:

<TABLE>
<CAPTION>

(DOLLARS IN THOUSANDS)                                                                    DECEMBER 31, 2004   SEPTEMBER 30,  2005
----------------------                                                                    -----------------   -------------------
<S>                                                                                              <C>                  <C>
ASSETS
Cash and due from banks................................................................          $  134,152            $   77,738
Interest bearing deposits in banks.....................................................             214,423               245,371
Loans..................................................................................           1,599,542             1,589,905
Due from customers on acceptances......................................................              32,074                48,038
Premises and equipment.................................................................               3,888                 3,030
Other assets...........................................................................              34,721                52,486
                                                                                                 ----------            ----------
Assets of discontinued operations to be disposed or sold...............................          $2,018,800            $2,016,568
                                                                                                 ==========            ==========
LIABILITIES
Noninterest bearing deposits...........................................................          $  541,467            $  508,705
Interest bearing deposits..............................................................             914,863               878,406
Other liabilities......................................................................              76,769                99,711
                                                                                                 ----------            ----------
Liabilities of discontinued operations to be extinguished or assumed...................          $1,533,099            $1,486,822
                                                                                                 ==========            ==========

</TABLE>

         The components of income from discontinued operations for the three and
nine months ended September 30, 2004 and 2005, respectively are:

<TABLE>
<CAPTION>

                                                                                   FOR THE THREE MONTHS  FOR THE NINE MONTHS
                                                                                   ENDED SEPTEMBER 30,   ENDED SEPTEMBER 30,
                                                                                   --------------------  -------------------
(DOLLARS IN THOUSANDS)                                                               2004       2005        2004       2005
----------------------                                                               ----       ----        ----       ----
<S>                                                                                 <C>         <C>       <C>         <C>
Net interest income............................................................    $ 5,512    $  5,400    $16,124     $15,683
Provision for loan losses......................................................        938          --      4,038       6,683
Noninterest income.............................................................     18,833      21,233     57,733      56,165
Noninterest expense............................................................     12,815      52,245     37,146      87,550
                                                                                   -------    --------    -------     -------
Income (loss) from discontinued operations before income taxes.................     10,592     (25,612)    32,673     (22,385)
Income tax expense (benefit)...................................................      4,094      (9,651)    12,628      (8,354)
                                                                                   -------    --------    -------    --------
Income (loss) from discontinued operations.....................................    $ 6,498    $(15,961)   $20,045    $(14,031)
                                                                                   =======    ========    =======    ========

</TABLE>

         Included in noninterest expense for the three and nine months ended
September 30, 2005 was approximately $25 million of severance expense and an
impairment of approximately $1 million was recorded relating to the write-off of
software in development. In addition, compliance related expenses, the majority
of which relates to outside consultants, were approximately $14 million and $25
million for the three and nine months ended September 30, 2005, respectively.
For the three and nine months ended September 30, 2004, these compliance related
expenses were $0.5 million and $0.5 million, respectively.


                                       13


<PAGE>


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


NOTE 4--EARNINGS PER SHARE

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

<TABLE>
<CAPTION>

                                                   THREE MONTHS ENDED SEPTEMBER 30,       NINE MONTHS ENDED SEPTEMBER 30,
                                                   --------------------------------       -------------------------------
                                                       2004               2005                2004                2005
                                                       ----               ----                ----                ----
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)     BASIC   DILUTED    BASIC    DILUTED    BASIC    DILUTED   BASIC    DILUTED
---------------------------------------------     -----   -------    -----    -------    -----    -------   -----    -------
<S>                                              <C>      <C>       <C>       <C>       <C>       <C>      <C>       <C>
Income from continuing operations............    $156,940 $156,940  $201,246  $201,246  $531,977  $531,977 $568,475  $568,475
Income (loss) from discontinued operations...       6,498    6,498   (15,961)  (15,961)   20,045    20,045  (14,031)  (14,031)
                                                 -------- --------  --------  --------  --------  -------- --------  --------
Net income...................................    $163,438 $163,438  $185,285  $185,285  $552,022  $552,022 $554,444  $554,444
                                                 ======== ========  ========  ========  ========  ======== ========  ========
Weighted average common shares outstanding...     147,555  147,555   144,459   144,459   147,548   147,548  145,326   145,326
Additional shares due to:
  Assumed conversion of dilutive stock options         --    2,824        --     3,154        --     2,479       --     2,736
                                                 -------- --------  --------  --------  --------  -------- --------  --------
Adjusted weighted average common shares
  outstanding................................     147,555  150,379   144,459   147,613   147,548   150,027  145,326   148,062
                                                 ======== ========  ========  ========  ========  ======== ========  ========
Income from continuing operations per share..       $1.06    $1.04     $1.39     $1.36     $3.61     $3.55    $3.91     $3.84
Income (loss) from discontinued operations per
  share......................................        0.05     0.05     (0.11)    (0.10)     0.13      0.13    (0.09)    (0.10)
                                                 -------- --------  --------  --------  --------  -------- --------  --------
Net income per share.........................       $1.11    $1.09     $1.28     $1.26     $3.74     $3.68    $3.82     $3.74
                                                 ======== ========  ========  ========  ========  ======== ========  ========

</TABLE>


                                       14


<PAGE>


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


NOTE 5--ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

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

<TABLE>
<CAPTION>

                                                                                                BEFORE
                                                                                                  TAX        TAX      NET OF
(DOLLARS IN THOUSANDS)                                                                          AMOUNT     EFFECT      TAX
----------------------                                                                          ------     ------      ---
<S>                                                                                            <C>        <C>       <C>
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004:
Cash flow hedge activities:
  Unrealized net gains on hedges arising during the period................................     $  12,680   $(4,850) $  7,830
  Reclassification adjustment for net gains on hedges included in net income..............       (61,725)   23,610   (38,115)
                                                                                               ---------   -------  --------
Net change in unrealized gains on hedges..................................................       (49,045)   18,760   (30,285)
                                                                                               ---------   -------  --------
Securities available for sale:
  Unrealized holding losses arising during the period on securities available for sale....       (68,679)   26,270   (42,409)
  Reclassification adjustment for net gains on securities available for sale included in
    net income............................................................................        (1,612)      617      (995)
                                                                                               ---------   -------  --------
Net change in unrealized losses on securities available for sale..........................       (70,291)   26,887   (43,404)
                                                                                               ---------   -------  --------
Foreign currency translation adjustment...................................................         1,025      (392)      633
                                                                                               ---------   -------  --------
Net change in accumulated other comprehensive income (loss)...............................     $(118,311)  $45,255  $(73,056)
                                                                                               =========   =======  ========
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005:
Cash flow hedge activities:
  Unrealized net losses on hedges arising during the period...............................     $ (31,082)  $11,889  $(19,193)
  Reclassification adjustment for net gains on hedges included in net income..............       (16,652)    6,369   (10,283)
                                                                                               ---------   -------  --------
Net change in unrealized losses on hedges.................................................       (47,734)   18,258   (29,476)
                                                                                               ---------   -------  --------
Securities available for sale:
  Unrealized holding losses arising during the period on securities available for sale....       (92,392)   35,340   (57,052)
  Reclassification adjustment for net losses on securities available for sale included in
    net income............................................................................        13,289    (5,083)    8,206
                                                                                               ---------   -------  --------
Net change in unrealized losses on securities available for sale..........................       (79,103)   30,257   (48,846)
                                                                                               ---------   -------  --------
Foreign currency translation adjustment...................................................           128       (49)       79
                                                                                               ---------   -------  --------
Minimum pension liability adjustment......................................................           (26)       10       (16)
                                                                                               ---------   -------  --------
Net change in accumulated other comprehensive income (loss)...............................     $(126,735)  $48,476  $(78,259)
                                                                                               =========   =======  ========

</TABLE>


                                       15


<PAGE>


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


NOTE 5--ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (CONTINUED)

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

<TABLE>
<CAPTION>
                                                                             NET
                                                              NET        UNREALIZED
                                                           UNREALIZED       GAINS
                                                         GAINS (LOSSES)   (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>
BALANCE, DECEMBER 31, 2003............................       $ 43,786     $ 22,535    $(10,293)     $(3,786)     $  52,242
Change during the period..............................        (30,285)     (43,404)        633           --        (73,056)
                                                             --------     --------    --------      -------      ---------
BALANCE, SEPTEMBER 30, 2004...........................       $ 13,501     $(20,869)   $ (9,660)     $(3,786)     $ (20,814)
                                                             ========     ========    ========      =======      =========
BALANCE, DECEMBER 31, 2004............................         $1,429     $(31,696)   $ (7,870)     $(6,690)     $ (44,827)
Change during the period..............................        (29,476)     (48,846)         79          (16)       (78,259)
                                                             --------     --------    --------      -------      ---------
BALANCE, SEPTEMBER 30, 2005...........................       $(28,047)    $(80,542)   $ (7,791)     $(6,706)     $(123,086)
                                                             ========     ========    ========      =======      =========

</TABLE>

NOTE 6--BUSINESS COMBINATIONS

         The following describes the Company's most recent acquisitions:

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

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

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

NOTE 7--GOODWILL AND INTANGIBLE ASSETS

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

<TABLE>
<CAPTION>

                                                         SEPTEMBER 30, 2004                     SEPTEMBER 30, 2005
                                                         ------------------                     ------------------
                                                 GROSS                                   GROSS
                                                CARRYING   ACCUMULATED  NET CARRYING   CARRYING    ACCUMULATED  NET CARRYING
DOLLARS IN THOUSANDS                             AMOUNT   AMORTIZATION     AMOUNT       AMOUNT    AMORTIZATION     AMOUNT
--------------------                             ------   ------------     ------       ------    ------------     ------
<S>                                              <C>         <C>             <C>         <C>         <C>             <C>
Core Deposit Intangibles....................     $62,888     $(25,680)       $37,208    $ 67,237     $(41,198)       $26,039
Rights-to-Expiration........................      35,808      (12,039)        23,769      35,808      (16,530)        19,278
Other.......................................          --           --             --       2,100         (636)         1,464
                                                 -------     --------        -------    --------     --------        -------
  Total.....................................     $98,696     $(37,719)       $60,977    $105,145     $(58,364)       $46,781
                                                 =======     ========        =======    ========     ========        =======

</TABLE>


                                       16


<PAGE>


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


NOTE 7--GOODWILL AND INTANGIBLE ASSETS (CONTINUED)

         Total amortization expense for the three-months ended September 30,
2004 and 2005 were $5.1 million and $5.0 million, respectively. For the
nine-months ended September 30, 2004 and 2005, the expense was $13.8 million and
$15.0 million, respectively.

<TABLE>
<CAPTION>

                                                                                                                     TOTAL
                                                                                                                  IDENTIFIABLE
                                                                                 CORE DEPOSIT  RIGHTS-TO-          INTANGIBLE
                                                                                 INTANGIBLES   EXPIRATION  OTHER     ASSETS
                                                                                 -----------   ----------  -----     ------
<S>                                                                                   <C>        <C>       <C>        <C>
Estimated amortization expense for the years ending:
  Remaining 2005..............................................................        $ 3,775    $ 1,056   $  124     $ 4,955
  2006........................................................................          9,571      3,672      389      13,632
  2007........................................................................          5,471      3,113      299       8,883
  2008........................................................................          3,245      2,622      231       6,098
  2009........................................................................          1,764      2,188      178       4,130
  2010........................................................................            807      1,805      138       2,749
  thereafter..................................................................          1,406      4,822      105       6,334
                                                                                      -------    -------   ------     -------
  Total amortization expense after September 30, 2005.........................        $26,039    $19,278   $1,464     $46,781
                                                                                      =======    =======   ======     =======

</TABLE>

         The changes in the carrying amount of goodwill during the nine months
ended September 30, 2004 and 2005 are shown below. An error in the recognition
of deferred taxes related to one of the bank acquisitions is included in the
table. This error had no impact on net income.

<TABLE>
<CAPTION>

(DOLLARS IN THOUSANDS)                                                                                     2004       2005
----------------------                                                                                     ----       ----
<S>                                                                                                       <C>        <C>
Balance, January 1,..................................................................................     $226,556   $450,961
Acquired during the nine months ended September 30,..................................................       94,279         --
  Contingent period adjustments......................................................................           --       (415)
  Correction of an error.............................................................................           --      2,071
                                                                                                          --------   --------
Balance, September 30,...............................................................................     $320,835   $452,617
                                                                                                          ========   ========

</TABLE>


NOTE 8--BUSINESS SEGMENTS

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

         o     The Community Banking and Investment Services Group offers a
               range of banking services, primarily to individuals and small
               businesses, delivered generally through a tri-state (California,
               Washington and Oregon) network of branches and ATMs. These
               services include mortgages, home equity lines of credit, consumer
               and commercial loans, deposit services and cash management as


                                       17


<PAGE>


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


NOTE 8--BUSINESS SEGMENTS (CONTINUED)

               well as fiduciary, private banking, investment and asset
               management services for individuals and institutions, and risk
               management and insurance products for businesses and individuals.
               At September 30, 2004 and 2005, this Group had $307.0 million and
               $314.8 million, respectively, of goodwill assigned to its
               businesses.

         o     The Commercial Financial Services Group provides credit,
               depository and cash management services to large corporate and
               middle- market companies and numerous specialty niches. Services
               include commercial and project loans, real estate financing,
               asset-based financing, trade finance and letters of credit, lease
               financing, customized cash management services and selected
               capital markets products. At September 30, 2004, this Group had
               $13.8 million of goodwill assigned to its businesses compared to
               $137.8 million of goodwill assigned to its businesses at
               September 30, 2005.

         The information, set forth in the tables on the following page,
reflects selected income statement and balance sheet items by business segment.
The information presented does not necessarily represent the business units'
financial condition and results of operations were they independent entities.
Unlike financial accounting, there is no authoritative body of guidance for
management accounting equivalent to US GAAP. Consequently, reported results are
not necessarily comparable with those presented by other companies. Included in
the tables within total assets are the amounts of goodwill for each business
segment as of September 30, 2004 and 2005.

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

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


                                       18


<PAGE>


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


NOTE 8--BUSINESS SEGMENTS (CONTINUED)

         The business units' results for the prior periods have been restated to
reflect changes in transfer pricing methodology, organizational changes and our
discontinued operations.

<TABLE>
<CAPTION>

                                                                                  COMMUNITY BANKING
                                                                               AND INVESTMENT SERVICES    COMMERCIAL FINANCIAL
                                                                                        GROUP               SERVICES GROUP
                                                                               -----------------------    --------------------
                                                                               AS OF AND FOR THE THREE MONTHS ENDED SEPTEMBER 30,
                                                                               --------------------------------------------------
                                                                                  2004          2005         2004       2005
                                                                                  ----          ----         ----       ----
<S>                                                                              <C>           <C>        <C>        <C>
RESULTS OF OPERATIONS (DOLLARS IN THOUSANDS):
Net interest income.......................................................       $197,024      $235,907   $176,381   $227,476
Noninterest income (expense)..............................................        127,907       138,885     63,020     67,994
                                                                                 --------      --------   --------   --------
Total revenue.............................................................        324,931       374,792    239,401    295,470
Noninterest expense.......................................................        242,406       246,936    104,361    122,404
Credit expense (income)...................................................          8,450         8,783     24,738     20,458
                                                                                 --------      --------   --------   --------
Income from continuing operations before income taxes.....................         74,075       119,073    110,302    152,608
Income tax expense........................................................         28,334        45,545     35,233     51,493
                                                                                 --------      --------   --------   --------
Income from continuing operations.........................................         45,741        73,528     75,069    101,115
Income (loss) from discontinued operations, net of income taxes...........             --            --         --         --
                                                                                 --------      --------   --------   --------
Net income................................................................       $ 45,741      $ 73,528   $ 75,069   $101,115
                                                                                 ========      ========   ========   ========
TOTAL ASSETS, END OF PERIOD (DOLLARS IN MILLIONS):........................       $ 14,867      $ 17,611   $ 15,751   $ 19,728
                                                                                 ========      ========   ========   ========

<CAPTION>

                                                                                                              UNIONBANCAL
                                                                                        OTHER                 CORPORATION
                                                                               -----------------------    --------------------
                                                                               AS OF AND FOR THE THREE MONTHS ENDED SEPTEMBER 30,
                                                                               --------------------------------------------------
                                                                                  2004          2005         2004       2005
                                                                                  ----          ----         ----       ----
<S>                                                                               <C>            <C>      <C>        <C>
RESULTS OF OPERATIONS (DOLLARS IN THOUSANDS):
Net interest income.........................................................      $33,173       $   759   $406,578   $464,142
Noninterest income (expense)................................................        6,193         5,309    197,120    212,188
                                                                                  -------       -------   --------   --------
Total revenue...............................................................       39,366         6,068    603,698    676,330
Noninterest expense.........................................................       12,809        27,356    359,576    396,696
Credit expense (income).....................................................      (44,127)      (44,241)   (10,939)   (15,000)
                                                                                  -------       -------   --------   --------
Income from continuing operations before income taxes.......................       70,684        22,953    255,061    294,634
Income tax expense..........................................................       34,554        (3,650)    98,121     93,388
                                                                                  -------       -------   --------   --------
Income from continuing operations...........................................       36,130        26,603    156,940    201,246
Income (loss) from discontinued operations, net of income taxes.............        6,498       (15,961)     6,498    (15,961)
                                                                                  -------       -------   --------   --------
Net income..................................................................      $42,628       $10,642   $163,438   $185,285
                                                                                  =======       =======   ========   ========
TOTAL ASSETS, END OF PERIOD (DOLLARS IN MILLIONS):..........................      $16,373       $13,960   $ 46,991   $ 51,299
                                                                                  =======       =======   ========   ========

</TABLE>


                                       19


<PAGE>


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


NOTE 8--BUSINESS SEGMENTS (CONTINUED)

<TABLE>
<CAPTION>

                                                                                  COMMUNITY BANKING
                                                                               AND INVESTMENT SERVICES    COMMERCIAL FINANCIAL
                                                                                        GROUP               SERVICES GROUP
                                                                               -----------------------    --------------------
                                                                               AS OF AND FOR THE NINE MONTHS ENDED SEPTEMBER 30,
                                                                               -------------------------------------------------
                                                                                  2004          2005         2004       2005
                                                                                  ----          ----         ----       ----
<S>                                                                              <C>          <C>         <C>        <C>
RESULTS OF OPERATIONS (DOLLARS IN THOUSANDS):
Net interest income.....................................................         $553,095    $  692,546   $495,870   $646,283
Noninterest income (expense)............................................          379,818       410,391    202,629    206,445
                                                                                 --------    ----------   --------   --------
Total revenue...........................................................          932,913     1,102,937    698,499    852,728
Noninterest expense.....................................................          695,739       763,189    311,470    346,525
Credit expense (income).................................................           24,134        25,423     82,443     65,500
                                                                                 --------    ----------   --------   --------
Income from continuing operations before income taxes...................          213,040       314,325    304,586    440,703
Income tax expense......................................................           81,488       120,229     97,187    147,343
                                                                                 --------    ----------   --------   --------
Income from continuing operations.......................................          131,552       194,096    207,399    293,360
Income (loss) from discontinued operations, net of income taxes.........               --            --         --         --
                                                                                 --------    ----------   --------   --------
Net income..............................................................         $131,552    $  194,096   $207,399   $293,360
                                                                                 ========    ==========   ========   ========
TOTAL ASSETS, END OF PERIOD (DOLLARS IN MILLIONS):......................         $ 14,867    $   17,611   $ 15,751   $ 19,728
                                                                                 ========    ==========   ========   ========

<CAPTION>
                                                                                                              UNIONBANCAL
                                                                                        OTHER                 CORPORATION
                                                                               -----------------------    --------------------
                                                                               AS OF AND FOR THE NINE MONTHS ENDED SEPTEMBER 30,
                                                                               -------------------------------------------------
                                                                                  2004          2005         2004       2005
                                                                                  ----          ----         ----       ----
<S>                                                                              <C>            <C>     <C>        <C>
RESULTS OF OPERATIONS (DOLLARS IN THOUSANDS):
Net interest income.......................................................       $147,280      $ 19,685 $1,196,245 $1,358,514
Noninterest income (expense)..............................................        117,987         4,531    700,434    621,367
                                                                                 --------      -------- ---------- ----------
Total revenue.............................................................        265,267        24,216  1,896,679  1,979,881
Noninterest expense.......................................................         77,542        68,334  1,084,751  1,178,048
Credit expense (income)...................................................       (135,615)     (131,606)   (29,038)   (40,683)
                                                                                 --------      -------- ---------- ----------
Income from continuing operations before income taxes.....................        323,340        87,488    840,966    842,516
Income tax expense........................................................        130,314         6,469    308,989    274,041
                                                                                 --------      -------- ---------- ----------
Income from continuing operations.........................................        193,026        81,019    531,977    568,475
Income (loss) from discontinued operations, net of income taxes...........         20,045       (14,031)    20,045    (14,031)
                                                                                 --------      -------- ---------- ----------
Net income................................................................       $213,071      $ 66,988 $  552,022 $  554,444
                                                                                 ========      ======== ========== ==========
TOTAL ASSETS, END OF PERIOD (DOLLARS IN MILLIONS):........................       $ 16,373      $ 13,960 $   46,991 $   51,299
                                                                                 ========      ======== ========== ==========

</TABLE>

NOTE 9--DERIVATIVE INSTRUMENTS AND OTHER FINANCIAL INSTRUMENTS USED FOR HEDGING

         Derivative positions are integral components of the Company's
designated ALM activities. The Company uses interest rate derivatives to manage
the sensitivity of the Company's net interest income to changes in interest
rates. These instruments are used to manage interest rate risk relating to
specified


                                       20


<PAGE>


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


NOTE 9--DERIVATIVE INSTRUMENTS AND OTHER FINANCIAL INSTRUMENTS USED FOR HEDGING
(CONTINUED)

groups of assets and liabilities, primarily LIBOR-based commercial loans,
certificates of deposit, medium-term notes and subordinated debt.

         CASH FLOW HEDGES
         HEDGING STRATEGIES FOR VARIABLE RATE LOANS AND CERTIFICATES OF DEPOSIT

         The Company engages in several types of cash flow hedging strategies
for which the hedged transactions are forecasted future loan and deposit
interest receipt and payments, and the hedged risk is the variability in those
receipts/payments due to changes in the designated benchmark rate, e.g., U.S.
dollar LIBOR. In these strategies, the hedging instruments are matched with
groups of variable rate loans or deposits such that the tenor of the variable
rate loans/deposits and that of the hedging instrument are aligned. Cash flow
hedging strategies include the utilization of purchased floor, cap, corridor
options and interest rate swaps. At September 30, 2005, the weighted average
remaining life of the currently active (excluding any forward positions) cash
flow hedges was approximately 1.5 years.

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

         The Company uses interest rate floor corridors to hedge the variable
cash flows associated with 1-month to 6-month LIBOR indexed loans. Net payments
to be received under the floor corridor contracts offset the decline in loan
interest income caused by the relevant LIBOR index falling below the corridor's
upper strike rate, but only to the extent the index falls to the lower strike
rate. The corridor will not provide protection from declines in the relevant
LIBOR index to the extent it falls below the corridor's lower strike rate.

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

         The Company uses interest rate swaps to hedge the variable cash flows
associated with 1-month to 6-month LIBOR indexed loans. Payments to be received
(or paid) under the swap contract will offset the fluctuations in loan interest
income caused by changes in the relevant LIBOR index. As such, these instruments
hedge all fluctuations in the loans' interest income caused by changes in the
relevant LIBOR index.

         The Company uses purchased interest rate caps to hedge the variable
interest cash flows associated with the forecasted issuance and rollover of
short-term, fixed rate certificates of deposit (CDs). In these hedging
relationships, the Company hedges the LIBOR component of the CD rates, which is
1-month to 6-month LIBOR, based on the CDs' original term to maturity, which
reflects their repricing frequency. Net payments to be received under the cap
contract offset the increase in interest expense caused by the relevant LIBOR
index rising above the cap's strike rate.

         The Company uses interest rate cap corridors to hedge the variable cash
flows associated with the forecasted issuance and rollover of short-term, fixed
rate CDs. In these hedging relationships, the


                                       21



<PAGE>


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


NOTE 9--DERIVATIVE INSTRUMENTS AND OTHER FINANCIAL INSTRUMENTS USED FOR HEDGING
(CONTINUED)

Company hedges the LIBOR component of the CD rates, either 1-month LIBOR,
3-month LIBOR, or 6-month LIBOR, based on the original term to maturity of the
CDs, which reflects their repricing frequency. Net payments to be received under
the cap corridor contract offset the increase in deposit interest expense caused
by the relevant LIBOR index rising above the corridor's lower strike rate, but
only to the extent the index rises to the upper strike rate. The corridor will
not provide protection from increases in the relevant LIBOR index to the extent
it rises above the corridor's upper strike rate.

         Hedging transactions are structured at inception so that the notional
amounts of the hedge are matched with an equal principal amount of loans or CDs,
the index and repricing frequencies of the hedge matches those of the loans or
CDs, and the period in which the designated hedged cash flows occurs is equal to
the term of the hedge. As such, most of the ineffectiveness in the hedging
relationship results from the mismatch between the timing of reset dates on the
hedge versus those of the loans or CDs. In the third quarter of 2005, the
Company recognized a net loss of $0.1 million due to ineffectiveness, which is
recognized in noninterest expense, compared to a net gain of $0.1 million in the
third quarter of 2004.

         FAIR VALUE HEDGES

         HEDGING STRATEGY FOR "MARKETPATH" CERTIFICATES OF DEPOSIT

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

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

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

         HEDGING STRATEGY FOR MEDIUM-TERM NOTES

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


                                       22


<PAGE>


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


NOTE 9--DERIVATIVE INSTRUMENTS AND OTHER FINANCIAL INSTRUMENTS USED FOR HEDGING
(CONTINUED)

         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.

         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 10--GUARANTEES

         Standby and commercial letters of credit are conditional commitments
issued to guarantee the performance of a customer to a third party. Standby
letters of credit generally are contingent upon the failure of the customer to
perform according to the terms of the underlying contract with the third party,
while commercial letters of credit are issued specifically to facilitate foreign
or domestic trade transactions. The majority of these types of commitments have
terms of one year or less. Collateral may be obtained based on management's
credit assessment of the customer. As of September 30, 2005, the Company's
maximum exposure to loss for standby and commercial letters of credit was $3.4
billion and $115.8 million, respectively. At September 30, 2005, the carrying
value of the Company's standby and commercial letters of credit totaled $8.0
million. Exposure to loss related to these commitments is covered by the
allowance for off-balance sheet commitments. Both of these amounts are included
in other liabilities on the condensed consolidated balance sheet. In addition,
the Company's maximum exposure to loss for standby and commercial letters of
credit related to discontinued operations was $48.4 million and $85.0 million,
respectively. The corresponding carrying value of these standby and commercial
letters of credit totaled $0.2 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


                                       23



<PAGE>


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


NOTE 10--GUARANTEES (CONTINUED)

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
September 30, 2005, the Company had commitments to fund principal investments of
$119.6 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 September 30, 2005, the Company had a maximum exposure of
$5.4 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 Company's ultimate exposure to loss. As of
September 30, 2005, the Company's maximum exposure to loss under these
guarantees was limited to a return of investor capital and minimum investment
yield, or $158.5 million. The Company maintains a reserve of $6.5 million for
these guarantees.

         The Company has guarantees that obligate it to perform if its
affiliates are unable to discharge their obligations. These obligations include
guarantee of commercial paper obligations and leveraged lease transactions.
Guarantees issued by the Bank for an affiliate's commercial paper program are
done in order to facilitate their sale. As of September 30, 2005, the Bank had a
maximum exposure to loss under the commercial paper guarantees, which have an
average term of less than one year, of $884.1million. The Bank's guarantee is
fully collateralized by a pledged deposit. UnionBanCal Corporation guarantees
its subsidiaries' leveraged lease transactions, which have terms ranging from 15
to 30 years. Following the original funding of the leveraged lease transactions,
UnionBanCal Corporation has no material obligation to be satisfied. As of
September 30, 2005, UnionBanCal Corporation had no material exposure to loss
under these guarantees.

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

         The Company occasionally enters into financial guarantee contracts
where a premium is received from another financial institution counterparty to
guarantee a portion of the credit risk on interest rate swap contracts entered
into between the financial institution and its customer. The Company becomes
liable to pay the financial institution only if the financial institution is
unable to collect amounts owed to


                                       24



<PAGE>


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


NOTE 10--GUARANTEES (CONTINUED)

them by their customer. As of September 30, 2005, the maximum exposure to loss
under these contracts totaled $11.9 million. The Company maintains a reserve of
$0.1 million for losses related to these guarantees.

NOTE 11--PENSION AND OTHER POSTRETIREMENT BENEFITS

         The following tables summarize the components of net periodic benefit
cost for the three and nine months ended September 30, 2004 and 2005.

<TABLE>
<CAPTION>

                                                                                       PENSION BENEFITS     OTHER BENEFITS
                                                                                       ----------------     --------------
                                                                                    FOR THE THREE MONTHS  FOR THE THREE MONTHS
                                                                                     ENDED SEPTEMBER 30,   ENDED SEPTEMBER 30,
                                                                                     -------------------   -------------------
(DOLLARS IN THOUSANDS)                                                                   2004       2005      2004      2005
----------------------                                                                   ----       ----      ----      ----
<S>                                                                                    <C>        <C>        <C>       <C>
COMPONENTS OF NET PERIODIC BENEFIT COST
Service cost......................................................................     $ 9,415    $11,383    $  849    $1,551
Interest cost.....................................................................      13,059     14,587     1,399     2,115
Expected return on plan assets....................................................     (20,782)   (23,966)   (2,292)   (2,626)
Amortization of prior service cost................................................         266        267       (24)      (24)
Amortization of transition amount.................................................          --         --       637       508
Recognized net actuarial loss.....................................................       3,609      6,656      (539)      699
                                                                                       -------    -------    ------    ------
  Total net periodic benefit cost.................................................     $ 5,567    $ 8,927    $   30    $2,223
                                                                                       =======    =======    ======    ======

<CAPTION>

                                                                                       PENSION BENEFITS     OTHER BENEFITS
                                                                                       ----------------     --------------
                                                                                    FOR THE NINE MONTHS   FOR THE NINE MONTHS
                                                                                     ENDED SEPTEMBER 30,   ENDED SEPTEMBER 30,
                                                                                     -------------------   -------------------
(DOLLARS IN THOUSANDS)                                                                   2004       2005      2004      2005
----------------------                                                                   ----       ----      ----      ----
<S>                                                                                    <C>       <C>         <C>       <C>
COMPONENTS OF NET PERIODIC BENEFIT COST
Service cost........................................................................   $28,244    $34,148    $4,232    $4,653
Interest cost.......................................................................    39,179     43,763     7,079     6,345
Expected return on plan assets......................................................   (62,347)   (71,899)   (6,759)   (7,801)
Amortization of prior service cost..................................................       800        800       (72)      (72)
Amortization of transition amount...................................................        --         --     1,912     1,526
Recognized net actuarial loss.......................................................    10,826     19,968     2,997     2,096
                                                                                       -------    -------    ------    ------
  Total net periodic benefit cost...................................................   $16,702    $26,780    $9,389    $6,747
                                                                                       =======    =======    ======    ======

</TABLE>


         In 2004, the Company recorded a $6.1 million reduction in employee
benefit expense associated with the remeasurement of postretirement benefits as
a result of the Medicare Prescription Drug, Improvement and Modernization Act of
2003 ("the Act"). The reduction is attributable to a federal subsidy provided by
the Act to employers that sponsor retiree health care plans with drug benefits
that are equivalent to those offered under Medicare Part D. The effect of the
subsidy on the measurement of net periodic postretirement benefit cost has been
recognized since the effective date of the Act, July 1, 2004. As a result, the
Company recorded a reduction in the accumulated postretirement benefit
obligation of $30.8 million relating to benefits attributable to past service in
the third quarter of 2004.


                                       25


<PAGE>


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


NOTE 11--PENSION AND OTHER POSTRETIREMENT BENEFITS (CONTINUED)

         At December 31, 2004, the Company expected to make cash contributions
of $125 million to the Pension Plan and $17 million to the Health Plan for
pension and postretirement benefits, respectively, in 2005. The Company made the
$125 million pension contribution in January 2005 and continues to make the
postretirement benefit contributions on a monthly basis. In July 2005, the
Company made an additional $57 million pension contribution.

NOTE 12--SUBSEQUENT EVENTS

         On October 6, 2005, the Bank received $245 million in cash from
Wachovia Bank, N.A. at the principal legal closing of the sale of the Bank's
international correspondent banking business. A gain of approximately $147
million, net of direct expenses and income tax expense will be recognized in the
fourth quarter 2005. The Bank may earn a contingent payment not to exceed $45
million of cash during the second quarter of 2006 based on customer conversion
results. The Bank continues to operate the international correspondent banking
business, and will continue to do so over a transition period of several months,
during which period it is expected that the majority of customers will transfer
to Wachovia Bank, N.A.

         On October 26, 2005, the Company's Board of Directors declared a
quarterly cash dividend of $0.41 per share of common stock. The dividend will be
paid on January 6, 2006 to stockholders of record as of December 9, 2005.


                                       26


<PAGE>


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

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

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

INTRODUCTION

         We are a California-based, commercial bank holding company with
consolidated assets of $51.3 billion at September 30, 2005. At September 30,
2005, The Bank of Tokyo-Mitsubishi, Ltd., our majority owner, owned
approximately 61 percent of our outstanding common stock.

EXECUTIVE OVERVIEW

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

         In the third quarter 2005 we signed a definitive agreement to sell our
international correspondent banking business to Wachovia Bank, N.A. The
principal legal closing of the transaction occurred on October 6, 2005 and we
received $245 million. In the fourth quarter 2005 we will record a gain of
approximately $147 million after recognizing direct expenses and income taxes
related to the transaction. We will continue to serve our customers impacted by
this transaction over the transition period, which is not expected to continue
beyond the second quarter 2006. The transaction has been accounted for as a
discontinued operation. The following discusses highlights from our continuing
operations that have been restated to reflect the impact of our discontinued
operations.

         Overall credit quality in the commercial lending area is stable. Our
nonaccrual portfolio declined to $38 million at September 30, 2005 compared to
$150 million at December 31, 2004 and $189 million at September 30, 2004. Loan
payoffs and chargeoffs, loan sales, the resumption to accrual status and the
absence of new inflows contributed to the decline in nonaccrual loans. We
reversed $15 million of our allowance for loan losses in the third quarter 2005
compared with a reversal of $10.9 million in the third quarter 2004. A
significant portion of the reversal in the third quarter 2005 ($10 million) was
the result of the impact to our non-specific allowance for loan losses from our
decision to exit the international correspondent banking business.

         Net interest income grew from $407 million for the three months ended
September 30, 2004 to $464 million for the three months ended September 30,
2005. Our 14 percent growth in net interest income reflects the impact of higher
interest rates and increased average earning assets and noninterest bearing
deposits, offset by lower income from our derivative hedges. We believe that as
interest rates gradually rise and our commercial loan portfolio continues its
growth, our net interest margin will be positively impacted through the
remainder of 2005.


                                       27


<PAGE>


         Noninterest income grew 7.6 percent in the third quarter 2005 compared
with the third quarter 2004 primarily from higher trust and investment
management fees, investment income and card processing fees.

         Noninterest expense grew 10.3 percent in the third quarter 2005
compared with the third quarter 2004, primarily from the investments we made in
bank acquisitions, de novo branches and technology in 2004. We believe that
these investments will continue to bring opportunities for growth in our
business by increasing our customer base and expanding the services we provide.

DISCONTINUED OPERATIONS

         During the third quarter 2005, we committed to a plan to exit our
international correspondent banking business and entered into a definitive
agreement to sell this business to Wachovia Bank, N.A. This business consists of
international payment and trade processing along with the related lending
activities. The principal legal closing of the transaction occurred on October
6, 2005 and we received $245 million. We will continue to operate this business
over a transition period that may extend to second quarter 2006.

         This transaction has been accounted for as a discontinued operation and
all prior periods, except where specifically mentioned, have been restated to
reflect this accounting treatment. All of the assets and liabilities of the
discontinued operations have been separately identified on our condensed
consolidated balance sheet and the assets are shown at the lower of cost or fair
value less costs to dispose. The average net assets or liabilities of our
discontinued operations are reflected in our analysis of net interest margin.
For the detailed components of our assets and liabilities from discontinued
operations, see Note 3 "Discontinued Operations" in the Condensed Consolidated
Financial Statements of this quarterly report on Form 10-Q.

         Included in our net income are the net results of our discontinued
operations. For the three and nine months ended September 30, 2004 and 2005,
income from discontinued operations included the following:

<TABLE>
<CAPTION>

                                                                                         FOR THE THREE         FOR THE NINE
                                                                                         MONTHS ENDED          MONTHS ENDED
                                                                                         SEPTEMBER 30,         SEPTEMBER 30,
                                                                                        --------------       ---------------
(DOLLARS IN THOUSANDS)                                                                  2004      2005       2004       2005
----------------------                                                                  ----      ----       ----       ----
<S>                                                                                   <C>         <C>      <C>        <C>
Net interest income...............................................................    $5,512    $  5,400   $16,124   $ 15,683
Provision for loan losses.........................................................       938          --     4,038      6,683
Noninterest income................................................................    18,833      21,233    57,733     56,165
Noninterest expense...............................................................    12,815      52,245    37,146     87,550
                                                                                      ------    --------   -------   --------
Income (loss) from discontinued operations before income taxes....................    10,592     (25,612)   32,673    (22,385)
Income tax expense (benefit)......................................................     4,094      (9,651)   12,628     (8,354)
                                                                                      ------    --------   -------   --------
Income (loss) from discontinued operations........................................    $6,498    $(15,961)  $20,045   $(14,031)
                                                                                      ======    ========   =======   ========

</TABLE>

         For the three months ended September 30, 2005, net interest income
included the allocation of interest expense of approximately $4.9 million from
continuing operations compared to interest income of $0.2 million for the three
months ended September 30, 2004. We allocated interest expense from continuing
operations to the average net assets of the discontinued operations based upon
the average federal funds purchased rate for the period. Noninterest expense
included severance and related benefit expenses of approximately $25 million and
approximately $14 million for compliance-related matters. An impairment charge
of $1 million resulted from the write-off of software in development. Expenses
related to the termination of lease contracts are not included in these results.
Upon ceasing to use the leased premises during the first six months of 2006, we
expect to record lease premise related expenses. We do not believe the amount of
this expense will be material. In the fourth quarter 2005, we will recognize a
gain of approximately $147 million, after income taxes and expenses directly
related to the transaction.


                                       28


<PAGE>


         The remaining discussion of our financial results is based on results
from continuing operations, unless otherwise stated.


CRITICAL ACCOUNTING POLICIES

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

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

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

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


                                       29


<PAGE>


FINANCIAL PERFORMANCE

<TABLE>
<CAPTION>

SUMMARY OF FINANCIAL PERFORMANCE

                                                   FOR THE THREE        INCREASE          FOR THE NINE          INCREASE
                                                    MONTHS ENDED       (DECREASE)         MONTHS ENDED         (DECREASE)
                                                   SEPTEMBER 30,    2005 VERSUS 2004      SEPTEMBER 30,     2005 VERSUS 2004
                                                   -------------    ----------------      -------------     ----------------
(DOLLARS IN THOUSANDS)                             2004     2005     AMOUNT  PERCENT     2004       2005     AMOUNT   PERCENT
----------------------                             ----     ----     ------  -------     ----       ----     ------   -------
<S>                                              <C>       <C>       <C>        <C>   <C>        <C>         <C>        <C>
RESULTS OF OPERATIONS
Net interest income(1)........................   $406,578  $464,142  $57,564     14.2%$1,196,245 $1,358,514  $162,269    13.6%
Noninterest income
  Service charges on deposit accounts.........     85,667    84,822     (845)    (1.0)   252,974    243,835    (9,139)   (3.6)
  Trust and investment management fees........     39,089    43,500    4,411     11.3    111,699    127,053    15,354    13.7
  Merchant banking fees.......................     11,682    11,257     (425)    (3.6)    26,863     35,637     8,774    32.7
  Brokerage commissions and fees..............      8,527     5,290   (3,237)   (38.0)    24,847     22,867    (1,980)   (8.0)
  Card processing fees, net...................      4,653     6,597    1,944     41.8     28,901     18,668   (10,233)  (35.4)
  Securities gains (losses), net..............         (6)     (320)    (314)      nm      1,612    (13,289)  (14,901)     nm
  Gain on private capital investments, net....        467     5,692    5,225       nm      7,798     18,888    11,090      nm
Gain on sale of merchant card portfolio.......         --        --       --       --     93,000         --   (93,000)     nm
  Other noninterest income....................     47,041    55,350    8,309     17.7    152,740    167,708    14,968     9.8
                                                 --------  --------  -------          ---------- ----------  --------
Total noninterest income......................    197,120   212,188   15,068      7.6    700,434    621,367   (79,067)  (11.3)
                                                 --------  --------  -------          ---------- ----------  --------
Total revenue.................................    603,698   676,330   72,632     12.0  1,896,679  1,979,881    83,202     4.4
Reversal of allowance for loan losses(2)......   (10,939)   (15,000)   4,061     37.1    (29,038)   (40,683)   11,645    40.1
Noninterest expense
  Salaries and employee benefits..............    209,554   236,124   26,570     12.7    632,463    701,858    69,395    11.0
  Outside services............................     19,572    28,533    8,961     45.8     52,130     76,248    24,118    46.3
  Foreclosed asset expense (income)...........        (10)   (3,435)  (3,425)      nm        526     (5,606)   (6,132)     nm
  Reversal of allowance for losses on
    off-balance sheet commitments(2)..........         --        --       --       --         --     (1,000)   (1,000)     nm
  Other noninterest expense...................    130,460   135,474    5,014      3.8    399,632    406,548     6,916     1.7
                                                 --------  --------  -------          ---------- ----------  --------
Total noninterest expense.....................    359,576   396,696   37,120     10.3  1,084,751  1,178,048    93,297     8.6
                                                 --------  --------  -------          ---------- ----------  --------
Income from continuing operations before income
  taxes.......................................    255,061   294,634   39,573     15.5    840,966    842,516     1,550     0.2
Income tax expense............................     98,121    93,388   (4,733)    (4.8)   308,989    274,041   (34,948)  (11.3)
                                                 --------  --------  -------          ---------- ----------  --------
Income from continuing operations.............    156,940   201,246   44,306     28.2    531,977    568,475    36,498     6.9
                                                 --------  --------  -------          ---------- ----------  --------
Income (loss) from discontinued operations
  before income taxes.........................     10,592   (25,612) (36,204)      nm     32,673    (22,385)  (55,058)     nm
Income tax expense (benefit)..................      4,094    (9,651) (13,745)      nm     12,628     (8,354)  (20,982)     nm
                                                 --------  --------  -------          ---------- ----------  --------
Income (loss) from discontinued operations....      6,498   (15,961) (22,459)      nm     20,045    (14,031)  (34,076)     nm
                                                 --------  --------  -------          ---------- ----------  --------
Net income....................................   $163,438  $185,285  $21,847     13.4%  $552,022   $554,444    $2,422     0.4%
                                                 ========  ========  =======          ========== ==========  ========
---------------
<FN>
(1)  Net interest income does not include any adjustments for fully taxable
     equivalence.

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

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

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

         o     The reversal of our allowance for loan losses in the third
               quarter of 2005 is primarily due to improving credit quality and
               the elimination of general reserves held for credit exposures in
               our discontinued operations. Credit quality continued to improve
               in our commercial loan portfolio evidenced by reductions in
               nonperforming assets. However, this trend is balanced by
               increasing


                                       30


<PAGE>


               uncertainty in the economic outlook coupled with indications that
               the improvement in credit quality could be reaching its peak.
               (See our discussion under "Allowance for Credit Losses.")

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

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

               o    Higher net gains on the sales and capital distributions on
                    private capital investments compared to the prior year
                    quarter;

               o    Trust and investment management fees were higher primarily
                    due to continued strong sales, solid organic growth and the
                    acquisition of the business portfolio of CNA Trust Company
                    (renamed TruSource) and the corporate trust business of the
                    BTM Trust Company, New York. Managed assets increased by
                    approximately 11.1 percent and non-managed assets increased
                    by approximately 28 percent from the third quarter 2004 to
                    the third quarter 2005. Total assets under administration
                    increased by approximately 26 percent, to $209.1 billion,
                    for the same period;

               o    Card processing fees increased primarily due to higher
                    Master Money Card (debit card) income; and

               o    Higher other income included the impact of a
                    reclassification of certain brokerage commissions and fees
                    (from brokerage fees to other noninterest income) and $2.5
                    million in COLI income, which was previously reported as an
                    offset to noninterest expense in the third quarter of 2004;
                    partly offset by

               o    Brokerage commissions and fees declined from the change in
                    classification, effective July 1, 2005, mentioned above; and

               o    Service charges on deposits declined primarily due to lower
                    account analysis fees, stemming from an increase in the
                    earnings credit rate on commercial deposit balances, partly
                    offset by higher overdraft fees related to a change in our
                    overdraft and nonsufficient funds fee structure.

         o     Our higher noninterest expense was due to several factors:

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

                    o    acquisitions and new branch openings, which accounted
                         for approximately 32 percent of the increase in our
                         salaries and other compensation;

                    o    higher performance-related incentive expense from goal
                         achievements and the increased amortization of
                         restricted stock in the third quarter of 2005 as a
                         result of the higher level of issuances in the second
                         quarter of 2005;

                    o    annual merit increases; and

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

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


                                       31


<PAGE>


               o    Other noninterest expense increased mainly due to higher
                    software expenses related to the purchase and development of
                    software to support key technology initiatives, advertising
                    and higher expenses related to the Jackson Federal Bank
                    acquisition; partly offset by

               o    Foreclosed asset income in the third quarter of 2005 was
                    higher due to a gain on the sale of a foreclosed commercial
                    property.

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

         o     The reversal of our allowance for loan losses in the first nine
               months of 2005 is primarily due to improving credit quality, the
               elimination of general reserves held for credit exposures in our
               discontinued operations and year-to-date net recoveries. (See our
               discussion under "Allowance for Credit Losses.")

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

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

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

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

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

               o    Brokerage commissions and fees declined primarily from a
                    change in classification of certain fees to other
                    noninterest income, effective July 1, 2005; partly offset by

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

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

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

               o    Higher other income included the impact of a
                    reclassification of certain brokerage commissions and fees
                    (from brokerage fees to other noninterest income) discussed
                    above and $5.7 million in COLI income, which was previously
                    reported as an offset to noninterest expense in the third
                    quarter of 2004.

         o     Our higher noninterest expense was mainly due to several factors:

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

                    o    acquisitions and new branch openings, which accounted
                         for approximately 26 percent of the increase in our
                         salaries and other compensation;


                                       32


<PAGE>


                    o    higher performance-related incentive expense from goal
                         achievements and the increased amortization of
                         restricted stock in the third quarter of 2005 as
                         discussed previously;

                    o    annual merit increases; and

                    o    higher employee benefits expense mainly due to the
                         impact of the lower discount rate we used to calculate
                         our future pension and other postretirement liabilities
                         (reduced from 6.25 percent at December 31, 2003 to 5.75
                         percent at December 31, 2004) and a $4.7 million
                         reclassification of COLI income to other noninterest
                         income (previously reported as employee benefits
                         expense in the prior year);

         o     Net occupancy expense increased mainly from acquisitions, new
               branch openings, the payment of a lease termination fee in the
               second quarter of 2005 and the impact of lower rental income from
               non-bank tenants due to bank employee occupancy as we migrate our
               operations into fewer downtown San Francisco locations;

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

         o     Foreclosed asset income in the first nine months of 2005 was
               primarily due to gains on the sale of two foreclosed commercial
               properties; and

         o     Other noninterest expense increased primarily as a result of
               higher software expenses related to the purchase and development
               of software to support key technology initiatives, higher
               expenses related to our acquisitions, including amortization of
               intangibles, and increased charitable contributions, offset by
               lower reserve expenses for litigation.


                                       33


<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
                               SEPTEMBER 30, 2004                SEPTEMBER 30, 2005              INCREASE (DECREASE) IN
                               ------------------                ------------------              ----------------------
                                                                                                                INTEREST
                                                                                                AVERAGE          INCOME/
                                                                                                BALANCE         EXPENSE (1)
                                      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) AMOUNT  PERCENT  AMOUNT  PERCENT
----------------------    -------    ----------  ---------- -------   ----------  ---------- ------- -------  ------  -------
<S>                     <C>             <C>         <C>   <C>             <C>         <C>   <C>        <C>    <C>       <C>
ASSETS
Loans:(3)
  Domestic............  $26,158,230     $340,348    5.19% $31,949,929     $459,280    5.72% $5,791,699  22.1% $118,932   34.9%
  Foreign(4)..........      143,684        1,586    4.39      227,887        2,612    4.55      84,203  58.6     1,026   64.7
Securities--taxable....  11,907,592      105,256    3.54    9,971,085       96,706    3.88  (1,936,507)(16.3)   (8,550)  (8.1)
Securities--tax-exempt.      68,884        1,416    8.22       65,800        1,350    8.21      (3,084) (4.5)      (66)  (4.7)
Interest bearing
  deposits in banks...      364,505        1,656    1.81       57,042          303    2.11    (307,463)(84.4)   (1,353) (81.7)
Federal funds sold and
  securities purchased
  under resale
  agreements..........      431,138        1,616    1.49      770,116        6,777    3.49     338,978  78.6     5,161     nm
Trading account assets      327,970        1,250    1.52      329,318        1,115    1.34       1,348   0.4      (135) (10.8)
                        -----------     --------          -----------     --------          ----------        --------
      Total earning
        assets........   39,402,003      453,128    4.59   43,371,177      568,143    5.21   3,969,174  10.1   115,015   25.4
                                        --------                          --------                            --------
Allowance for loan
  losses(5)...........     (499,440)                         (392,651)                         106,789 (21.4)
Cash and due from banks   2,154,048                         2,232,281                          78,233    3.6
Premises and
  equipment, net......      500,123                           514,156                           14,033   2.8
Other assets..........    1,915,970                         2,487,066                          571,096  29.8
                        -----------                       -----------                       ----------
      Total assets....  $43,472,704                       $48,212,029                       $4,739,325  10.9%
                        ===========                       ===========                       ==========
LIABILITIES
Domestic deposits:
  Interest bearing....  $11,775,553       18,536    0.63  $13,157,103       44,318    1.34  $1,381,550  11.7%   25,782     nm
  Savings and consumer
    time..............    4,382,668        9,027    0.82    4,642,782       15,668    1.34     260,114   5.9     6,641   73.6
  Large time..........    1,932,610        7,162    1.47    2,588,559       18,997    2.91     655,949  33.9    11,835     nm
Foreign deposits(4)...      218,131          370    0.67      517,298        3,813    2.92     299,167    nm     3,443     nm
                        -----------     --------          -----------     --------          ----------        --------
      Total interest
        bearing
        deposits......   18,308,962       35,095    0.76   20,905,742       82,796    1.57   2,596,780  14.2    47,701     nm
                        -----------     --------          -----------     --------          ----------        --------
Federal funds
  purchased and
  securities sold
  under repurchase
  agreements..........      867,988        2,861    1.31      630,272        5,158    3.25    (237,716)(27.4)    2,297   80.3
Net funding allocated
  from (to)
  discontinued
  operations(6).......       46,149          152    1.31     (593,732)      (4,864)   3.25    (639,881)   nm    (5,016)    nm
Commercial paper......      639,345        1,697    1.06    1,207,822        9,394    3.09     568,477  88.9     7,697     nm
Other borrowed funds..      161,290        1,122    2.77      173,853        1,707    3.89      12,563   7.8       585   52.1
Medium and long-term
  debt................      792,083        4,369    2.19      817,602        8,520    4.13      25,519   3.2     4,151   95.0
Trust notes...........       15,959          242    6.07       15,506          239    6.15        (453) (2.8)       (3)  (1.2)
                        -----------     --------          -----------     --------          ----------        --------
      Total borrowed
        funds.........    2,522,814       10,443    1.65    2,251,323       20,154    3.55    (271,491)(10.8)    9,711   93.0
                        -----------     --------          -----------     --------          ----------        --------
      Total interest
        bearing
        liabilities...   20,831,776       45,538    0.87   23,157,065      102,950    1.76   2,325,289  11.2    57,412     nm
                                        --------                          --------                            --------
Noninterest bearing
  deposits............   17,628,751                        19,387,786                        1,759,035  10.0
Other liabilities(5)..      944,224                         1,392,056                          447,832  47.4
                        -----------                       -----------                       ----------
      Total liabilities  39,404,751                        43,936,907                        4,532,156  11.5
STOCKHOLDERS' EQUITY
Common equity.........    4,067,953                         4,275,122                          207,169   5.1
                        -----------                       -----------                       ----------
      Total
        stockholders'
        equity........    4,067,953                         4,275,122                          207,169   5.1
                        -----------                       -----------                       ----------
      Total
        liabilities
        and
        stockholders'
        equity........  $43,472,704                       $48,212,029                       $4,739,325  10.9%
                        ===========                       ===========                       ==========
NET INTEREST
  INCOME/MARGIN
Net interest
  income/margin
  (taxable-equivalent
  basis)..............                   407,590    4.13%                  465,193    4.27%                     57,603   14.1
Less:
  taxable-equivalent
  adjustment..........                     1,012                             1,051                                  39    3.9
                                        --------                          --------                            --------
      Net interest
        income........                  $406,578                          $464,142                             $57,564   14.2%
                                        ========                          ========                            ========

Average Assets and
  Liabilities of
  Discontinued
  Operations for the
  three months ended:

<CAPTION>
                                    SEPTEMBER 30,                    SEPTEMBER 30,
                                        2004                             2005
                                        ----                             ----
<S>                                   <C>                               <C>
  Assets..............                $2,239,965                        $1,978,255
  Liabilities.........                $2,286,114                        $1,384,523
  Net assets
    (liabilities).....                  $(46,149)                         $593,732
---------------
<FN>
(1)  Yields and interest income are presented on a taxable-equivalent basis
     using the federal statutory tax rate of 35 percent.

(2)  Annualized.

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

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

(5)  The average allowance related to off-balance sheet commitments was included
     in other liabilities starting in the quarter ended March 31, 2005. Prior
     periods have not been restated.

(6)  In September 2005, Union Bank of California, N.A. committed to a plan for
     disposal of its international correspondent banking business. All periods
     presented have been restated to reflect discontinued operations. Net
     funding allocated from (to) discontinued operations represents the shortage
     (excess) of assets over liabilities of discontinued operations. The expense
     (earnings) on funds allocated from (to) discontinued operations are
     calculated by taking the net balance of discontinued operations for each
     quarter and applying an earnings rate or a cost of funds equivalent to the
     corresponding quarter's fed funds purchased rate.

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


                                       34


<PAGE>



<TABLE>
<CAPTION>

                                            FOR THE NINE MONTHS ENDED
                               SEPTEMBER 30, 2004                SEPTEMBER 30, 2005              INCREASE (DECREASE) IN
                               ------------------                ------------------              ----------------------
                                                                                                                INTEREST
                                                                                                AVERAGE          INCOME/
                                                                                                BALANCE         EXPENSE (1)
                                      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) AMOUNT  PERCENT  AMOUNT  PERCENT
----------------------    -------    ----------  ---------- -------   ----------  ---------- ------- -------  ------  -------
<S>                      <C>            <C>         <C>   <C>          <C>           <C>    <C>         <C>   <C>       <C>
ASSETS
Loans:(3)
  Domestic.............. $25,213,753    $987,987    5.23% $30,633,865  $1,298,240     5.66% $5,420,112  21.5% $310,253   31.4%
  Foreign(4)............    114,723        4,053    4.72      209,337       7,567     4.83      94,614  82.5     3,514   86.7
Securities--taxable...... 11,664,022     317,390    3.63   10,678,358     298,317     3.72    (985,664) (8.5)  (19,073)  (6.0)
Securities--tax-exempt...     68,120       4,175    8.17       66,379       4,022     8.08      (1,741) (2.6)     (153)  (3.7)
Interest bearing
  deposits in banks.....     159,386       1,946    1.63       96,961       1,432     1.97     (62,425)(39.2)     (514) (26.4)
Federal funds sold and
  securities purchased
  under resale
  agreements............     786,045       6,503    1.11      615,967      14,406     3.13    (170,078)(21.6)    7,903     nm
Trading account assets..     346,473       2,728    1.05      275,087       3,072     1.49     (71,386)(20.6)      344   12.6
                         -----------   ---------                       ----------           ----------        --------
      Total earning
        assets..........  38,352,522   1,324,782    4.61   42,575,954   1,627,056     5.10   4,223,432  11.0   302,274   22.8
                                       ---------                       ----------                             --------
Allowance for loan
  losses(5).............    (519,393)                        (398,404)                         120,989 (23.3)
Cash and due from banks.   2,144,157                        2,240,948                           96,791   4.5
Premises and equipment,
  net...................     508,314                          519,915                           11,601   2.3
Other assets............   1,839,780                        2,404,271                          564,491  30.7
                         -----------                      -----------                       ----------
      Total assets...... $42,325,380                      $47,342,684                       $5,017,304  11.9%
                         ===========                      ===========                       ==========
LIABILITIES
Domestic deposits:
  Interest bearing...... $11,538,769      51,199    0.59  $12,614,932     101,752     1.08  $1,076,163   9.3%   50,553   98.7
  Savings and consumer
    time................   4,248,057      26,282    0.83    4,707,515      42,841     1.22     459,458  10.8    16,559   63.0
  Large time............   2,185,349      22,712    1.39    2,758,495      53,208     2.58     573,146  26.2    30,496     nm
Foreign deposits(4).....     254,754         951    0.50      431,599       8,247     2.55     176,845  69.4     7,296     nm
                         -----------   ---------                       ----------           ----------        --------
      Total interest
        bearing deposits  18,226,929     101,144    0.74   20,512,541     206,048     1.34   2,285,612  12.5   104,904     nm
                         -----------   ---------                       ----------           ----------        --------
Federal funds purchased
  and securities sold
  under repurchase
  agreements............     537,169       4,094    1.02    1,021,123      20,829     2.73     483,954  90.1    16,735     nm
Net funding allocated
  from (to)
  discontinued
  operations(6).........    (124,459)       (554)   0.59     (535,998)    (11,499)    2.87    (411,539)   nm   (10,945)    nm
Commercial paper........     566,776       3,883    0.92    1,078,558      21,761     2.70     511,782  90.3    17,878     nm
Other borrowed funds....     174,470       3,599    2.76      183,997       5,053     3.67       9,527   5.5     1,454   40.4
Medium and long-term
  debt..................     805,863      11,201    1.86      808,686      22,511     3.72       2,823   0.4    11,310     nm
Trust notes.............      78,139       2,553    4.36       15,618         715     6.10     (62,521)(80.0)   (1,838) (72.0)
                         -----------   ---------                       ----------           ----------        --------
      Total borrowed
        funds...........   2,037,958      24,776    1.62    2,571,984      59,370     3.09     534,026  26.2    34,594     nm
                         -----------   ---------                       ----------           ----------        --------
      Total interest
        bearing
        liabilities.....  20,264,887     125,920    0.83   23,084,525     265,418     1.54   2,819,638  13.9   139,498     nm
                                       ---------                       ----------                             --------
Noninterest bearing
  deposits..............  17,168,125                       18,792,219                        1,624,094   9.5
Other liabilities(5)....     908,174                        1,256,056                          347,882  38.3
                         -----------                      -----------                       ----------
      Total liabilities.  38,341,186                       43,132,800                        4,791,614  12.5
STOCKHOLDERS' EQUITY
Common equity...........   3,984,194                        4,209,884                          225,690   5.7
                         -----------                      -----------                       ----------
      Total
        stockholders'
        equity..........   3,984,194                        4,209,884                          225,690   5.7
                         -----------                      -----------                       ----------
      Total liabilities
        and
        stockholders'
        equity.......... $42,325,380                      $47,342,684                       $5,017,304  11.9%
                         ===========                      ===========                       ==========
NET INTEREST
  INCOME/MARGIN
Net interest
  income/margin
  (taxable-equivalent
  basis)................               1,198,862    4.17%               1,361,638     4.27%                    162,776   13.6
Less:
  taxable-equivalent
  adjustment............                   2,617                            3,124                                  507   19.4
                                       ---------                       ----------                             --------
      Net interest
        income..........              $1,196,245                       $1,358,514                             $162,269   13.6%
                                      ==========                       ==========                             ========

Average Assets and
  Liabilities of
  Discontinued Operations
  for the nine months
  ended:

<CAPTION>
                                    SEPTEMBER 30,                    SEPTEMBER 30,
                                        2004                             2005
                                        ----                             ----
<S>                                   <C>                              <C>
  Assets................              $2,137,241                       $1,974,884
  Liabilities...........              $2,012,782                       $1,438,886
  Net assets
    (liabilities).......                $124,459                         $535,998
---------------
<FN>
(1)  Yields and interest income are presented on a taxable-equivalent basis
     using the federal statutory tax rate of 35 percent.

(2)  Annualized.

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

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

(5)  The average allowance related to off-balance sheet commitments was included
     in other liabilities starting in the quarter ended March 31, 2005. Prior
     periods have not been restated.

(6)  In September 2005, Union Bank of California, N.A. committed to a plan for
     disposal of its international correspondent banking business. All periods
     presented have been restated to reflect discontinued operations. Net
     funding allocated from (to) discontinued operations represents the shortage
     (excess) of assets over liabilities of discontinued operations. The expense
     (earnings) on funds allocated from (to) discontinued operations are
     calculated by taking the net balance of discontinued operations for each
     quarter and applying an earnings rate or a cost of funds equivalent to the
     corresponding quarter's fed funds purchased rate. The year-to-date expense
     (earnings) amount is the sum of the quarterly amounts.

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


                                       35


<PAGE>


         Net interest income in the third quarter 2005, on a taxable-equivalent
basis, increased 14 percent, from the third quarter 2004. Our results were
primarily due to the following:

         o     The growth in average earning assets was primarily due to an
               increase in average loans. The increase in average loans was
               largely due to a $1.9 billion increase in average commercial
               loans, a $2.2 billion increase in average residential mortgages,
               and a $1.3 billion increase in average commercial mortgages;

         o     Deposit growth contributed favorably to net interest margin in
               the third quarter 2005. Average noninterest bearing deposits were
               higher in the third quarter 2005, compared to the third quarter
               2004, mainly due to higher average business demand deposits,
               including an increase in demand deposits from our title and
               escrow clients and higher consumer demand deposit growth;

         o     Yields on our earning assets were favorably impacted by the
               increasing interest rate environment resulting in a higher
               average yield of 62 basis points on average earning assets,
               despite being negatively impacted by lower hedge income, which
               decreased by $16.0 million; and

         o     In the third quarter 2005, our cost of funds on interest bearing
               liabilities was negatively impacted by the increasing rate
               environment, resulting in a higher average cost of
               interest-bearing liabilities of 89 basis points, which included
               lower hedge income, which decreased by $1.5 million.

         As a result of these changes, our net interest margin increased by 14
basis points.

         We use derivatives to hedge expected changes in the yields on our
variable rate loans and term certificates of deposit (CDs), and to convert our
long-term, fixed-rate borrowings to floating rate. Throughout 2005, these
derivative positions have provided less net interest income than in 2004, as
positions matured and, to a lesser extent, as interest rates rose. However, as
we expected, the declines in hedge income have been offset by increased yields
on the underlying variable rate loans. For the quarters ended September 30, 2004
and 2005, we had hedge income of $20.4 million and $2.9 million, respectively.


         Net interest income in the first nine months 2005, on a
taxable-equivalent basis, increased 14 percent, from the first nine months 2004.
Our results were primarily due to the following:

         o     The growth in average earning assets was primarily due to an
               increase in average loans. The increase in average loans was
               largely due to a $2.4 billion increase in average residential
               mortgages, a $1.6 billion increase in average commercial loans
               and a $1.2 billion increase in average commercial mortgages;

         o     Deposit growth contributed favorably to net interest margin in
               the first nine months 2005. Average noninterest bearing deposits
               were higher in the first nine months 2005, compared to the first
               nine months 2004, mainly due to higher average business demand
               deposits, including demand deposits from our title and escrow
               clients and higher consumer demand deposit growth;

         o     Yields on our earning assets were favorably impacted by the
               increasing interest rate environment and higher cash basis
               recoveries, resulting in a higher average yield of 49 basis
               points on average earning assets, despite being negatively
               impacted by lower hedge income, which decreased by $53.3 million;
               and

         o     In the first nine months 2005, our cost of funds on interest
               bearing liabilities was negatively impacted by the increasing
               rate environment, resulting in a higher average cost of
               interest-bearing liabilities of 71 basis points, including lower
               hedge income, which decreased by $6.3 million.

         As a result of these changes, our net interest margin increased by 10
basis points.

         We use derivatives to hedge expected changes in the yields on our
variable rate loans and term certificates of deposit (CDs), and to convert our
long-term, fixed-rate borrowings to floating rate. Throughout 2005, these
derivative positions have provided less net interest income than in 2004, as
positions matured and, to a lesser extent, as interest rates rose. However, as
we expected, the declines in


                                       36


<PAGE>


hedge income have been offset by increased yields on the underlying variable
rate loans. For the nine months ended September 30, 2004 and 2005, we had hedge
income of $79.4 million and $19.8 million, respectively.

<TABLE>
<CAPTION>

NONINTEREST INCOME

                                        FOR THE THREE MONTHS ENDED                      FOR THE NINE MONTHS ENDED
                                        --------------------------                      -------------------------
                                                             INCREASE (DECREASE)                            INCREASE (DECREASE)
                                                             ------------------                             -------------------
                                 SEPTEMBER 30,  SEPTEMBER 30,                   SEPTEMBER 30, SEPTEMBER 30,
(DOLLARS IN THOUSANDS)               2004          2005       AMOUNT   PERCENT      2004         2005        AMOUNT     PERCENT
----------------------               ----          ----       ------   -------      ----         ----        ------     -------
<S>                                <C>          <C>          <C>       <C>       <C>           <C>         <C>          <C>
Service charges on deposit
  accounts..................       $ 85,667     $ 84,822    $  (845)    (1.0)%   $252,974      $243,835    $ (9,139)     (3.6)%
Trust and investment
  management fees...........         39,089       43,500      4,411     11.3      111,699       127,053      15,354      13.7
Insurance commissions.......         17,463       17,819        356      2.0       57,850        59,176       1,326       2.3
Merchant banking fees.......         11,682       11,257       (425)    (3.6)      26,863        35,637       8,774      32.7
Foreign exchange gains,
  net.......................          8,268        8,849        581       nm       24,209        25,570       1,361       5.6
Brokerage commissions and
  fees......................          8,527        5,290     (3,237)   (38.0)      24,847        22,867      (1,980)     (8.0)
Card processing fees, net...          4,653        6,597      1,944     41.8       28,901        18,668     (10,233)    (35.4)
Securities gains (losses),
  net.......................            (6)        (320)       (314)      nm        1,612       (13,289)    (14,901)       nm
Gain on private capital
  investments, net..........            467        5,692      5,225       nm        7,798        18,888      11,090     142.2
Gain on sale of merchant
  card portfolio............             --           --         --       nm       93,000            --     (93,000)       nm
Other.......................         21,310       28,682      7,372     34.6       70,681        82,962      12,281      17.4
                                   --------     --------    -------              --------      --------    --------
    Total noninterest income       $197,120     $212,188    $15,068      7.6%    $700,434      $621,367    $(79,067)    (11.3)%
                                   ========     ========    =======              ========      ========    ========
---------------
nm--not meaningful

</TABLE>

<TABLE>
<CAPTION>

NONINTEREST EXPENSE

                                              FOR THE THREE MONTHS ENDED                      FOR THE NINE MONTHS ENDED
                                              --------------------------                      -------------------------
                                                                 INCREASE (DECREASE)                             INCREASE (DECREASE)
                                                                 ------------------                              -------------------
                                    SEPTEMBER 30,  SEPTEMBER 30,                    SEPTEMBER 30,  SEPTEMBER 30,
(DOLLARS IN THOUSANDS)                  2004           2005       AMOUNT   PERCENT      2004           2005       AMOUNT  PERCENT
----------------------              -------------  -------------  ------   -------  -------------  -------------  ------  -------
<S>                                   <C>            <C>          <C>       <C>      <C>           <C>            <C>      <C>
Salaries and other compensation.....  $175,619       $190,293     $14,674    8.4%    $  509,646    $  556,249     $46,603    9.1%
Employee benefits...................    33,935         45,831      11,896   35.1        122,817       145,609      22,792   18.6
                                      --------       --------     -------             ----------    ----------     -------
  Salaries and employee benefits....   209,554        236,124      26,570   12.7        632,463       701,858      69,395   11.0
Net occupancy.......................    32,029         34,336       2,307    7.2         93,517       100,251       6,734    7.2
Outside services....................    19,572         28,533       8,961   45.8         52,130        76,248      24,118   46.3
Equipment...........................    15,949         15,832        (117)  (0.7)        49,370        50,176         806    1.6
Software............................    12,790         14,374       1,584   12.4         37,309        43,072       5,763   15.4
Professional services...............    11,976         11,240        (736)  (6.1)        33,410        36,131       2,721    8.1
Communications......................    10,234         10,808         574    5.6         31,728        30,950        (778)  (2.5)
Advertising and public relations....     7,843          9,114       1,271   16.2         27,154        25,657      (1,497)  (5.5)
Data processing.....................     8,146          7,406        (740)  (9.1)        24,416        24,703         287    1.2
Intangible asset amortization.......     5,077          4,985         (92)  (1.8)        13,783        14,956       1,173    8.5
Foreclosed asset expense (income)...       (10)        (3,435)      (3,425)   nm            526        (5,606)     (6,132)    nm
Reversal of allowance for losses on
  off-balance sheet commitments(1)..        --             --          --     --             --        (1,000)     (1,000)    nm
Other...............................    26,416         27,379         963    3.6         88,945        80,652      (8,293)  (9.3)
                                      --------       --------     -------            ----------    ----------     -------
    Total noninterest expense.......  $359,576       $396,696     $37,120   10.3%    $1,084,751    $1,178,048     $93,297    8.6%
                                      ========       ========     =======            ==========    ==========     =======
---------------
<FN>
(1)  Beginning in the quarter ended March 31, 2005, the net change in the
     allowance for losses on off-balance sheet commitments was recognized
     separately from the change in the allowance for loan losses. Prior periods
     have not been restated.

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


                                       37


<PAGE>


INCOME TAX EXPENSE

         The following discussion of our income tax expense is based upon net
income and therefore includes our discontinued operations. Income tax expense in
the third quarter of 2005 resulted in a 31 percent effective income tax rate
compared with an effective tax rate of 38 percent for the third quarter of 2004.
In the third quarter of 2005, we recognized reductions to income tax expense of
approximately $9.0 million primarily related to the decrease in our California
effective tax rate for 2005, the adjustment of 2004 California tax expense to
reflect the tax as reported on the tax return filed on the worldwide unitary
basis, and to California Enterprise Zone credits, primarily from prior years,
for which we qualified during the third quarter. In the third quarter of 2004,
we recognized an increase to income tax expense of approximately $7.8 million
primarily related to the adjustment of 2003 California tax expense as reported
on 2003 worldwide unitary tax return.

         Income tax expense in the first nine months of 2005 resulted in a 32
percent effective tax rate compared with an effective tax rate of 37 percent for
the first nine months of 2004. The decrease in the year-to-date tax rate was due
primarily to a reduction in reserves of $10.0 million in the first quarter of
2005 for estimated amounts owed to the Internal Revenue Service with respect to
certain leveraged leasing transactions, and the third quarter tax adjustments
described above.

         For further information regarding income tax expense, see "Management's
Discussion and Analysis of Financial Condition and Results of Operations--Income
Tax Expense" in our Annual Report on Form 10-K for the year ended December 31,
2004.



LOANS

<TABLE>
<CAPTION>

         The following table shows loans outstanding by loan type.

                                                                                               INCREASE (DECREASE)
                                                                                             SEPTEMBER 30, 2005 FROM:
                                                                                             ------------------------
                                            SEPTEMBER 30, DECEMBER 31,  SEPTEMBER 30,     SEPTEMBER 30,       DECEMBER 31,
                                                2004          2004          2005             2004                2004
                                                ----          ----          ----             ----                ----
(DOLLARS IN THOUSANDS)                                                                  AMOUNT    PERCENT   AMOUNT    PERCENT
----------------------                                                                  ------    -------   ------    -------
<S>                                           <C>           <C>          <C>           <C>          <C>    <C>          <C>
Domestic:
  Commercial, financial and industrial...     $ 9,545,482   $ 9,760,756  $10,791,643   $1,246,161    13.1% $1,030,887    10.6%
  Construction...........................       1,103,970     1,130,070    1,366,413      262,443    23.8     236,343    20.9
  Mortgage:
    Residential..........................       8,821,566     9,538,150   10,976,681    2,155,115    24.4   1,438,531    15.1
    Commercial...........................       4,356,052     5,409,029    5,590,774    1,234,722    28.3     181,745     3.4
                                              -----------   -----------  -----------   ----------          ----------
      Total mortgage.....................      13,177,618    14,947,179   16,567,455    3,389,837    25.7   1,620,276    10.8
  Consumer:
    Installment..........................         779,857       767,767      834,653       54,796     7.0      66,886     8.7
    Revolving lines of credit............       1,496,581     1,581,863    1,653,275      156,694    10.5      71,412     4.5
                                              -----------   -----------  -----------   ----------          ----------
      Total consumer.....................       2,276,438     2,349,630    2,487,928      211,490     9.3     138,298     5.9
  Lease financing........................         612,054       609,090      574,798      (37,256)   (6.1)    (34,292)   (5.6)
                                              -----------   -----------  -----------   ----------          ----------
      Total loans in domestic offices....      26,715,562    28,796,725   31,788,237    5,072,675    19.0   2,991,512    10.4
Loans originated in foreign branches.....         184,335       194,790      205,375       21,040    11.4      10,585     5.4
                                              -----------   -----------  -----------   ----------          ----------
      Total loans held to maturity.......      26,899,897    28,991,515   31,993,612    5,093,715    18.9   3,002,097    10.4
      Total loans held for sale..........           2,294       117,900       11,135        8,841   385.4    (106,765)  (90.6)
                                              -----------   -----------  -----------   ----------          ----------
        Total loans......................     $26,902,191   $29,109,415  $32,004,747   $5,102,556    19.0% $2,895,332     9.9%
                                              ===========   ===========  ===========   ==========          ==========

</TABLE>

         COMMERCIAL, FINANCIAL AND INDUSTRIAL LOANS

         Commercial, financial and industrial loans represent one of the largest
categories in the loan portfolio. These loans are extended principally to
corporations, middle-market businesses, and small businesses, with no industry
concentration exceeding 10 percent of total loans. In addition, we believe our


                                       38


<PAGE>


geographic diversification based upon our customers' revenue bases lowers our
vulnerability to changes in the regional and national outlook for the U.S.
economy.

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

         The commercial, financial and industrial loan portfolio increase in the
third quarter of 2005 from the third quarter of 2004 was mainly due to increased
loan demand in the California middle-market and specialty segments, which
reflected the improving economy in those markets.

         CONSTRUCTION AND COMMERCIAL MORTGAGE LOANS

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

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

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

         RESIDENTIAL MORTGAGE LOANS

         We originate residential mortgage loans, secured by one-to-four family
residential properties, through our multiple channel network (including
branches, mortgage brokers, and loan-by-phone) throughout California, Oregon and
Washington, and we periodically purchase loans in our market area. At September
30, 2005, 55 percent of our residential mortgage loans were interest only, of
which none are negative amortizing. At origination, these interest only loans
had high credit scores with an average of 65 percent loan-to-value (LTV) ratio.
The remainder of the portfolio consists of balloon or regular amortizing loans.

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

         CONSUMER LOANS

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


                                       39


<PAGE>


         LEASE FINANCING

         We primarily offer two types of leases to our customers: direct
financing leases, where the assets leased are acquired without additional
financing from other sources; and leveraged leases, where a substantial portion
of the financing is provided by debt with no recourse to us. The lease financing
decrease from September 30, 2004 was attributable to the run-off of our
discontinued auto leasing activity. At September 30, 2005, our auto lease
portfolio had declined to $4.6 million and will fully mature by mid-year 2006.
Included in our lease portfolio are leveraged leases of $561 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 US GAAP and by law, the gross lease receivable is offset by the
qualifying non-recourse debt. In leveraged lease transactions, the third-party
lender may only look to the collateral value of the leased assets for repayment.

CROSS-BORDER OUTSTANDINGS

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

<TABLE>
<CAPTION>

                                                                                              PUBLIC  CORPORATIONS
                                                                                 FINANCIAL    SECTOR   AND OTHER       TOTAL
(DOLLARS IN MILLIONS)                                                           INSTITUTIONS ENTITIES  BORROWERS   OUTSTANDINGS
---------------------                                                           ------------ --------  ---------   ------------
<S>                                                                                  <C>        <C>          <C>          <C>
September 30, 2004
Korea......................................................................          $623       $--           $4          $627
December 31, 2004
Korea......................................................................          $615       $--           $3          $618
September 30, 2005
Korea......................................................................          $656       $--          $10          $666

</TABLE>

REVERSAL OF ALLOWANCE FOR CREDIT LOSSES

         We recorded a reversal of the allowance for loan losses of $15 million
in the third quarter of 2005, compared with a reversal of the allowance for
credit losses of $11 million in the third quarter of 2004. Provisions for loan
losses are charged to income to bring our allowance for loan losses to a level
deemed appropriate by management based on the factors discussed under "Allowance
for Credit Losses" below. Beginning with first quarter 2005, changes in the
allowance for losses related to off-balance sheet commitments are recognized in
noninterest expense. There was no provision or recovery for losses related to
the change in the allowance for losses on off-balance sheet commitments in the
third quarter 2005.

ALLOWANCE FOR CREDIT LOSSES

         ALLOWANCE POLICY AND METHODOLOGY

         We maintain an allowance for credit losses to absorb losses inherent in
the loan portfolio as well as for leases and off-balance sheet commitments.
Understanding our policies on the allowance for credit losses is fundamental to
understanding our consolidated financial condition and consolidated results of
operations.


                                       40


<PAGE>


Accordingly, our significant policies and methodology on the allowance for
credit losses are discussed in detail in Note 1 in the "Notes to Consolidated
Financial Statements" and in the section "Allowance for Credit Losses" included
in our "Management's Discussion and Analysis of Financial Condition and Results
of Operations" in our 2004 Annual Report on Form 10-K, which was filed with the
SEC.

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

         At September 30, 2005, our total allowance for credit losses was $445
million, which consisted of $363 million related to loans and $82 million
related to off-balance sheet commitments. The allowance for credit losses
consisted of $375 million and $70 million of allocated and unallocated
allowance, respectively. At September 30, 2005, our allowance for credit loss
coverage ratios were 1.39 percent of total loans and 1,272 percent of total
nonaccrual loans. At December 31, 2004, our total allowance for credit losses
was at $482 million, or 1.65 percent of the total loan portfolio and 338 percent
of total nonaccrual loans.

         In addition, the allowance incorporates the results of measuring
impaired loans as provided in SFAS No. 114, "Accounting by Creditors for
Impairment of a Loan" as amended by SFAS No. 118, "Accounting by Creditors for
Impairment of a Loan--Income Recognition and Disclosures." These accounting
standards prescribe the measurement methods, income recognition and disclosures
related to impaired loans. At September 30, 2005, total impaired loans were $35
million, and the associated impairment allowance was $8 million, compared with
$88 million and $24 million, respectively, at December 31, 2004.

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

         During the third quarter of 2005, there were no material changes in
estimation methods or assumptions that affected our methodology for assessing
the appropriateness of the formula and specific allowance for credit losses. We
recorded a total reversal of our allowance for credit losses of $15 million in
the third quarter 2005. Approximately $10 million of this reversal reflects the
impact on the general allowance from the decision to exit the international
correspondent banking business and approximately $5 million of this reversal was
the result of management's assessment of factors, including improvements in the
quality of our loan portfolio, the continued improvement in the U.S. economy and
improving conditions in domestic markets in which we operate, offset by the
growth in the loan portfolio and the adverse impact of increasing fuel costs
across the whole economy.

         CHANGES IN THE ALLOCATED (FORMULA AND SPECIFIC) ALLOWANCE

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

         At September 30, 2005, the specific allowance decreased to $10 million,
compared to $38 million at December 31, 2004. This decrease is primarily
reflective of lower nonaccrual loans and leases.

         CHANGES IN THE UNALLOCATED ALLOWANCE

         At September 30, 2005, the unallocated allowance decreased to $70
million from $83 million at December 31, 2004, reflecting the decline in
exposures in our leasing portfolio as a result of the charge-off of certain
aircraft leases, and improvements in both the commercial real estate and power
company portfolios. Additionally, the reasons for which an unallocated allowance
is warranted are detailed below.

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


                                       41


<PAGE>


         Although in certain instances the downgrading of a loan resulting from
the effects of the conditions described below has been reflected in the formula
allowance, management believes that the impact of these events on the
collectibility of the applicable loans may not have been reflected in the level
of nonperforming loans or in the internal risk grading process with respect to
such loans. In addition, our formula allowance does not take into consideration
sector-specific changes in the severity of losses that are expected to arise
from current economic conditions compared with our historical losses.
Accordingly, our evaluation of the probable losses related to the impact of
these factors was reflected in the unallocated allowance. The evaluations of the
inherent losses with respect to these factors are subject to higher degrees of
uncertainty because they are not identified with specific problem credits.

         The following describes the specific conditions we considered.

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

         o     With respect to commercial real estate, we considered slightly
               improved vacancy rates and rent growth being experienced
               nationally, which reduced our attribution to a range of $8
               million to $18 million.

         o     With respect to leasing, we considered an improvement for some
               electric service providers, the realization of losses in the
               aircraft lease portfolio and the remaining aircraft lease
               exposures, which reduced our attribution to a range of $3 million
               to $6 million.

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

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


                                       42


<PAGE>


         CHANGE IN THE TOTAL ALLOWANCE FOR CREDIT LOSSES

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

<TABLE>
<CAPTION>

                                   FOR THE THREE MONTHS                          FOR THE NINE MONTHS
                                   --------------------                          -------------------
                                    ENDED SEPTEMBER 30,    INCREASE (DECREASE)    ENDED SEPTEMBER 30,    INCREASE (DECREASE)
                                    -------------------    -------------------    -------------------    -------------------
(DOLLARS IN THOUSANDS)               2004        2005        AMOUNT    PERCENT     2004        2005        AMOUNT    PERCENT
----------------------               ----        ----        ------    -------     ----        ----        ------    -------
<S>                                  <C>         <C>        <C>          <C>      <C>         <C>        <C>          <C>

Balance, beginning of period...      $499,580    $394,972   $(104,608)   (20.9)%  $532,910    $399,156   $(133,754)   (25.1)%
Loans charged off:
  Commercial, financial and
    industrial.................        13,700       8,629      (5,071)   (37.0)     52,888      15,992     (36,896)   (69.8)
  Construction.................           200          --        (200)  (100.0)        200         118         (82)   (41.0)
  Commercial mortgage..........            --           8           8       nm          43       1,315       1,272       nm
  Consumer.....................         1,520       1,136        (384)   (25.3)      4,795       3,238      (1,557)   (32.5)
  Lease financing..............           183      19,656      19,473       nm       2,207      19,857      17,650    799.7
                                     --------    --------   ---------             --------    --------   ---------
    Total loans charged off....        15,603      29,429      13,826     88.6      60,133      40,520     (19,613)   (32.6)
Recoveries of loans previously
  charged off:
  Commercial, financial and
    industrial.................         8,216      12,632       4,416     53.7      29,127      44,073      14,946     51.3
  Construction.................            --          --          --       --          --          34          34       nm
  Commercial mortgage..........            --          --          --       --       1,571          48      (1,523)   (96.9)
  Consumer.....................           350         361          11      3.1       1,241       1,362         121      9.8
  Lease financing..............            40          12         (28)   (70.0)        191         149         (42)   (22.0)
                                     --------    --------   ---------             --------    --------   ---------
    Total recoveries of loans
      previously charged off...         8,606      13,005       4,399     51.1      32,130      45,666      13,536     42.1
                                     --------    --------   ---------             --------    --------   ---------
      Net loans charged off
        (recovered)............         6,997      16,424       9,427    134.7      28,003      (5,146)    (33,149)  (118.4)
Reversal of allowance for loan
  losses.......................       (10,939)    (15,000)     (4,061)    37.1     (29,038)    (40,683)    (11,645)     40.1
Foreign translation adjustment
  and other net additions
  (deductions)(1)..............            (2)        123         125       nm       5,773          52      (5,721)   (99.1)
                                     --------    --------   ---------             --------    --------   ---------
Ending balance of allowance for
  loan losses(2)...............      $481,642    $363,671   $(117,971)   (24.5)%  $481,642    $363,671   $(117,971)   (24.5)%
Allowance for losses on
  off-balance sheet
  commitments(2)...............            --      81,375      81,375       nm          --      81,375      81,375       nm
                                     --------    --------   ---------             --------    --------   ---------
Allowance for credit losses....      $481,642    $445,046   $ (36,596)    (7.6)%  $481,642    $445,046   $ (36,596)    (7.6)%
                                     ========    ========   =========             ========    ========   =========
Allowance for credit losses to
  total loans..................          1.79%       1.39%                            1.79%       1.39%
Reversal of allowance for loan
  losses to net loans charged
  off (recovered)..............            nm          nm                                nm      790.58
Net loans charged off
  (recovered) to average loans
  outstanding for the period(3)          0.11        0.20                              0.15       (0.02)
---------------
<FN>
(1)  Includes $5.7 million related to the Business Bank of California
     acquisition in the first quarter of 2004.

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

(3)  Annualized.

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

         Total loans charged off in the third quarter 2005 increased from the
third quarter 2004, primarily attributable to the charge-off of certain aircraft
leases. Total loans charged off in the nine months ended September 2005
decreased from the nine months ended September 30, 2004, primarily attributable
to the improvements in the credit quality of our portfolio, partly offset by the
charge-off of certain aircraft leases. Charge-offs reflect the realization of
losses in the portfolio that were recognized previously through provision for
credit losses. In both the three and nine months ended September 30, 2005,
recoveries of loans previously charged off increased from the same periods in
2004, primarily attributable to higher


                                       43


<PAGE>


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

NONPERFORMING ASSETS

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

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

         The following table sets forth an analysis of nonperforming assets.

<TABLE>
<CAPTION>

                                                                                            INCREASE (DECREASE)
                                                                                          SEPTEMBER 30, 2005 FROM:
                                                                                          ------------------------
                                                                                   SEPTEMBER 30,           DECEMBER 31,
                                                                                        2004                   2004
                                                                                        ----                   ----
                                         SEPTEMBER 30, DECEMBER 31, SEPTEMBER 30,
(DOLLARS IN THOUSANDS)                        2004          2004         2005       AMOUNT     PERCENT     AMOUNT      PERCENT
----------------------                        ----          ----         ----       ------     -------     ------      -------
<S>                                         <C>          <C>           <C>        <C>          <C>        <C>          <C>
Commercial, financial and industrial       $ 90,506     $ 58,538      $ 24,654   $ (65,852)    (72.8)%   $ (33,884)    (57.9)%
Construction.......................           6,180        2,622            --      (6,180)   (100.0)       (2,622)   (100.0)
Commercial mortgage................          28,396       26,519        10,326     (18,070)    (63.6)      (16,193)    (61.1)
Lease financing....................          53,758       54,894            --     (53,758)   (100.0)      (54,894)   (100.0)
                                           --------     --------      --------   ---------               ---------
    Total nonaccrual loans.........         178,840      142,573        34,980    (143,860)    (80.4)     (107,593)    (75.5)
Foreclosed assets..................          10,607        7,282         2,527      (8,080)    (76.2)       (4,755)    (65.3)
                                           --------     --------      --------   ---------               ---------
    Total nonperforming assets.....        $189,447     $149,855      $ 37,507   $(151,940)    (80.2)    $(112,348)    (75.0)
                                           ========     ========      ========   =========               =========
Allowances for credit losses(1)....        $481,642     $481,531      $445,046   $ (36,596)     (7.6)%   $ (36,485)     (7.6)%
                                           ========     ========      ========   =========               =========
Nonaccrual loans to total loans....            0.66%        0.49%         0.11%
Allowances for credit losses to
  nonaccrual loans.................          269.31       337.74      1,272.29
Nonperforming assets to total loans
  and foreclosed assets............            0.70         0.51          0.12
Nonperforming assets to total
  assets...........................            0.40         0.31          0.07
---------------
<FN>
(1)  Includes allowance for losses on off-balance sheet commitments.
</FN>
</TABLE>

         At September 30, 2005, our nonperforming assets included approximately
$9.5 million in acquired syndicated loans. The decreases in nonaccrual lease
financings was primarily due to the charge-off of certain aircraft leases.
During the third quarter 2005, we sold $4.0 million of nonperforming loans
compared to none in the third quarter 2004. Losses and gains, to the extent
previously charged-off, from these sales are reflected in our net charge-offs.


                                       44


<PAGE>

<TABLE>
<CAPTION>


LOANS 90 DAYS OR MORE PAST DUE AND STILL ACCRUING

                                                                                                INCREASE (DECREASE)
                                                                                              SEPTEMBER 30, 2005 FROM:
                                                                                              ------------------------
                                              SEPTEMBER 30, DECEMBER 31, SEPTEMBER 30,    SEPTEMBER 30,       DECEMBER 31,
                                                  2004          2004         2005             2004                2004
                                                  ----          ----         ----             ----                ----
(DOLLARS IN THOUSANDS)                                                                   AMOUNT    PERCENT   AMOUNT   PERCENT
----------------------                                                                   ------    -------   ------   -------
<S>                                                  <C>          <C>             <C>   <C>         <C>       <C>       <C>
Commercial, financial and industrial.......          $1,892       $1,315        $  778  $(1,114)    (58.9)%   $(537)    (40.8)%
Construction...............................           2,137           --            --   (2,137)   (100.0)       --        nm
Residential mortgage.......................           3,353        1,385         3,042     (311)     (9.3)    1,657     119.6
Consumer and other.........................           1,249        1,157           883     (366)    (29.3)     (274)    (23.7)
                                                     ------       ------        ------  -------               -----
Total loans 90 days or more past due and
  still accruing...........................          $8,631       $3,857        $4,703  $(3,928)    (45.5)%   $ 846      21.9%
                                                     ======       ======        ======  =======               =====
---------------
<FN>
nm = not meaningful
</FN>
</TABLE>

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

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

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

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

         INTEREST RATE RISK MANAGEMENT (OTHER THAN TRADING)

         During the third quarter 2005, our asset-sensitivity was reduced,
reversing the upward trend of the first six months of 2005. The reduction in
asset-sensitivity during the third quarter 2005 reflected the combination of a
shift in ALM strategy that took place in the third quarter 2005 and changes
underway in the core balance sheet (for additional information see "ALM
Activities" section below). In particular was the interest rate risk impact of
changes in deposit market pricing conditions. We observed an increasing


                                       45


<PAGE>


responsiveness of non-maturity deposit rates to changes in short-term market
rates in recent months, especially during the current quarter. This has occurred
as a result of the delayed response of deposit rates to the increases in market
rates since 2004. Our modeling of this change in the deposit-pricing environment
resulted in a reduction in the reported asset-sensitivity of our earnings during
the third quarter 2005.

         In the table below, a +200 basis points parallel rate shift at
September 30, 2005 would have produced an estimated 1.04 percent increase in
Economic NII (net interest income), while a -200 basis points shift would have
lowered Economic NII by an estimated 2.22 percent. This compares with an
estimated 0.81 percent and negative 1.70 percent, respectively, at September 30,
2004. We caution, however, that modeling changes implemented over this period
may make year-over-year comparisons no longer meaningful. Economic NII adjusts
our reported NII for the effect of certain non-interest, DDA-related, fee and
expense items. Those adjustment items are innately liability-sensitive, meaning
that reported NII is more asset-sensitive than is Economic NII.

ECONOMIC NII
<TABLE>
<CAPTION>

                                                                                            SEPTEMBER 30,  JUNE 30,  SEPTEMBER 30,
(DOLLARS IN MILLIONS)                                                                            2004       2005        2005
---------------------                                                                            ----       ----        ----
<S>                                                                                              <C>       <C>           <C>
+200 basis points.....................................................................           $13.1     $51.3         $20.4
as a percentage of base case NII......................................................            0.81%     2.68%         1.04%
-200 basis points.....................................................................          $(27.6)   $(66.5)       $(43.3)
as a percentage of base case NII......................................................            1.70%     3.48%         2.22%

</TABLE>

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

         The table above presents the impact on economic NII on a consolidated
basis, which represents the true economic interest rate risk, reflecting the
assets and liabilities of the international correspondent banking business as
they are expected to run off in coming months under the terms of the recently
announced sale of that unit (see discussion under "Discontinued Operations"). On
a continuing operations basis, our asset-sensitivity at September 30, 2005, was
affected only marginally. Economic NII would have risen by 1.09 percent under a
+200 basis points parallel shift and would have fallen by 2.27 percent had rates
moved down by 200 basis points.

         ALM ACTIVITIES

         In general, our unhedged, core balance sheet is asset-sensitive,
meaning that our loans generally re-price more quickly than our core deposits.
In managing the interest sensitivity of our balance sheet, we use the ALM
securities portfolio and derivatives positions as our primary tools. During the
third quarter 2005, we continued to allow runoff in our relatively short
duration ALM securities to help support loan growth. However, new derivative
hedges were added during the third quarter 2005 as described below, to help
reduce our overall asset-sensitivity.

         ALM INVESTMENTS

         At September 30, 2005, our securities available for sale portfolio
included $8.3 billion of securities for ALM purposes, compared with $11.2
billion at September 30, 2004. During the third quarter 2005, approximately $700
million of ALM securities matured or were called, divided evenly between direct
Agency obligations and mortgage-backed securities. The estimated ALM portfolio
effective duration was 2.0 at September 30, 2005, compared to 2.4 at September
30, 2004.


                                       46


<PAGE>


         Effective duration is a measure of price sensitivity of a bond
portfolio to immediate parallel shifts in interest rates. An effective duration
of 2.0 suggests an expected price change of approximately minus 2.0 percent for
an immediate one percent rise in interest rates.

         ALM DERIVATIVES

         During the third quarter 2005, we purchased $1 billion notional amount
in new derivative hedges in order to reduce the asset-sensitivity of our overall
balance sheet. Together with the $300 million in maturing positions, our ALM
derivatives portfolio increased by $700 million between June 30 and September
30, 2005. During the nine months ended September 30, 2005, the ALM derivatives
portfolio has declined by a net $1.73 billion notional, as $2.73 billion
notional of contracts have matured, offset by the $1 billion notional of
interest rate swaps added in the most recent quarter. The fair value of the ALM
derivative contracts have declined throughout the year as several "in-the-money"
contracts have matured and as the value of our remaining receive fixed and floor
positions have declined with rising interest rates. For additional discussion of
derivative instruments and our hedging strategies, see Note 8 to our Condensed
Consolidated Financial Statements included in this report and Note 18 to our
Consolidated Financial Statements included in our Annual Report on Form 10-K for
the year ended December 31, 2004.

         The following table provides the notional value and the fair value of
our ALM derivatives portfolio as of December 31, 2004, June 30 and September 30,
2005 and the change in fair value between June 30 and September 30, 2005.

<TABLE>
<CAPTION>
                                                                                                              INCREASE /
                                                                                                              (DECREASE)
                                                                                                          FROM JUNE 30, 2005
                                                                 DECEMBER 31,   JUNE 30,   SEPTEMBER 30,   TO SEPTEMBER 30,
(DOLLARS IN THOUSANDS)                                               2004         2005          2005             2005
----------------------                                               ----         ----          ----             ----
<S>                                                                <C>          <C>            <C>            <C>
Total gross notional amount of positions held for purposes
  other than trading:.........................................     $9,880,000   $7,450,000     $8,150,000     $700,000
  Of which, interest rate swaps pay fixed rates of interest:..     $       --   $       --     $       --          $--
                                                                   ----------   ----------     ----------     --------
Fair value of positions held for purposes other than trading:
  Gross positive fair value...................................        $45,434   $   36,596     $   15,690     $(20,906)
  Gross negative fair value...................................     $  (15,461)  $  (23,259)    $  (48,118)    $(24,859)
                                                                   ----------   ----------     ----------     --------
    Fair value of position....................................     $   29,973   $   13,337     $  (32,428)    $(45,765)
                                                                   ==========   ==========     ==========     ========

</TABLE>

         TRADING ACTIVITIES

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

         We began marketing energy derivatives contracts to existing energy
industry customers, primarily oil and gas producers, in late 2004, in order to
meet their hedging needs. Volume increased from $42 million in notional amount
of contracts outstanding as of December 31, 2004 to $832 million as of September
30, 2005. Consistent with our customer interest rate derivatives business, all
transactions are fully matched to remove our exposure to market risk, with
income produced from the credit spread earned.

         For information about the market risk in our trading activities, please
see "Quantitative and Qualitative Disclosures about Market Risk" in
"Management's Discussion and Analysis of Financial


                                       47


<PAGE>


Condition and Results of Operations" in our Annual Report on Form 10-K for the
year ended December 31, 2004.

LIQUIDITY RISK

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

         Core deposits provide us with a sizable source of relatively stable and
low-cost funds. Our average core deposits, which include demand deposits, money
market demand accounts, and savings and time deposits (of $100 thousand or
less), combined with average common stockholders' equity, funded over 76 percent
of average total assets of $48 billion in the third quarter of 2005. Most of the
remaining funding was provided by short-term borrowings in the form of
negotiable certificates of deposit, large time deposits, federal funds
purchased, securities sold under repurchase agreements, commercial paper, and
other borrowings.

         The securities portfolio provides additional enhancement to our
liquidity position, which may be created through either securities sales or
repurchase agreements. At September 30, 2005, we could have sold or transferred
under repurchase agreements almost $6 billion of our available for sale
securities. Liquidity may also be provided by the sale or maturity of other
assets such as interest-bearing deposits in banks, federal funds sold and
trading account securities. For the quarter ended September 30, 2005, the
aggregate balance of these assets averaged $1 billion. Additional liquidity may
be provided through loan maturities and sales.

REGULATORY CAPITAL

         The following tables summarize our risk-based capital, risk-weighted
assets, and risk-based capital ratios. The tables include assets of discontinued
operations.

<TABLE>
<CAPTION>

UNIONBANCAL CORPORATION

                                                                                             MINIMUM
                          SEPTEMBER 30,        DECEMBER 31,         SEPTEMBER 30,          REGULATORY
(DOLLARS IN THOUSANDS)        2004                2004                  2005               REQUIREMENT
----------------------     -----------         -----------           -----------           -----------
<S>                        <C>                 <C>                   <C>
CAPITAL COMPONENTS
Tier 1 capital.............$ 3,760,291         $ 3,817,698           $ 3,963,712
Tier 2 capital.............    949,091             968,294               883,832
                           -----------         -----------           -----------
Total risk-based capital...$ 4,709,382         $ 4,785,992           $ 4,847,544
                           ===========         ===========           ===========
Risk-weighted assets.......$37,622,266         $39,324,859           $44,630,199
                           ===========         ===========           ===========
Quarterly average assets   $45,444,623         $47,168,683           $49,819,315
                           ===========         ===========           ===========

<CAPTION>

CAPITAL RATIOS           AMOUNT     RATIO     AMOUNT     RATIO      AMOUNT     RATIO      AMOUNT     RATIO
--------------           ------     -----     ------     -----      ------     -----      ------     -----
<S>                     <C>           <C>     <C>          <C>     <C>           <C>     <C>           <C>
Total capital (to
  risk-weighted
  assets)..........     $4,709,382  12.52% $4,785,992    12.17%  $4,847,544    10.86% > $3,570,416    8.0%
                                                                                      -
Tier 1 capital (to
  risk-weighted
  assets)..........      3,760,291   9.99   3,817,698     9.71    3,963,712     8.88  > 1,785,208      4.0
                                                                                      -

Leverage(1)........      3,760,291   8.27   3,817,698     8.09    3,963,712     7.96  > 1,992,773      4.0
---------------                                                                       -
<FN>
(1)  Tier 1 capital divided by quarterly average assets (excluding certain
     intangible assets).
</FN>
</TABLE>


                                       48


<PAGE>


<TABLE>
<CAPTION>

UNION BANK OF CALIFORNIA, N.A.

                                                                                            MINIMUM         "WELL-CAPITALIZED"
                        SEPTEMBER 30,         DECEMBER 31,         SEPTEMBER 30,          REGULATORY           REGULATORY
(DOLLARS IN THOUSANDS)      2004                  2004                 2005               REQUIREMENT          REQUIREMENT
----------------------  -------------         ------------         -------------          -----------       ------------------
<S>                      <C>                  <C>                   <C>
CAPITAL COMPONENTS
Tier 1 capital.......... $ 3,791,489          $ 3,597,738           $ 4,068,332
Tier 2 capital..........     487,480              493,756               441,350
                         -----------          -----------           -----------
Total risk-based
   capital.............. $ 4,278,969          $ 4,091,494           $ 4,509,682
                         ===========          ===========           ===========
Risk-weighted assets.... $36,919,037          $38,711,682           $43,966,515
                                              ===========           ===========
Quarterly average assets $44,943,543          $46,588,762           $49,138,592
                         ===========          ===========           ===========

<CAPTION>

CAPITAL RATIOS        AMOUNT      RATIO      AMOUNT     RATIO     AMOUNT     RATIO      AMOUNT     RATIO     AMOUNT     RATIO
--------------        ------      -----      ------     -----     ------     -----      ------     -----     ------     -----
<S>                  <C>           <C>     <C>           <C>    <C>           <C>     <C>            <C>  <C>            <C>
Total capital (to
  risk-weighted
  assets)........    $4,278,969    11.59%  $4,091,494    10.57% $4,509,682    10.26% > $3,517,321    8.0% > $4,396,652    10.0%
                                                                                     -                    -
Tier 1 capital (to
  risk-weighted
  assets)........     3,791,489    10.27    3,597,738     9.29   4,068,332     9.25  >  1,758,661    4.0  > 2,637,991     6.0
                                                                                     -                    -

Leverage(1)......     3,791,489     8.44    3,597,738     7.72   4,068,332     8.28  >  1,965,544    4.0  > 2,456,930     5.0
---------------                                                                      -                    -
<FN>
(1)  Tier 1 capital divided by quarterly average assets (excluding certain
     intangible assets).
</FN>
</TABLE>

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

         The decrease in our capital ratios from September 30, 2004, was
attributable to higher risk-weighted assets and also stock repurchase. Our
Leverage ratio decrease was primarily due to a $4 billion, or 10 percent,
increase in quarterly average assets, which was substantially the result of
increases in both our residential mortgage and commercial loan portfolios.

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

BUSINESS SEGMENTS

         In April 2005, we announced several organizational changes that
affected our business segments. The Global Markets Group has been eliminated and
the activities of this group have been transferred. Corporate Treasury, which is
responsible for ALM and the investment portfolio, is now included in "Other."
The trading of securities and foreign exchange contracts, as well as the
responsibilities for customer accommodated derivative contracts are now included
in the "Global Markets Division" of the Community Banking and Investment
Services Group. In addition, the discontinued operations resulting from the sale
of most of our International Banking Group is also reflected in "Other." We are
now organized around the target markets we serve and operate in two principal
areas, 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, market and operational. Credit
risk is the potential loss in economic value due to the likelihood that the
obligor will not perform as agreed. Market risk is the potential loss in fair
value due to changes in interest rates, currency rates and equity prices.
Operational risk is the potential loss due to all other factors, such as
failures in internal control, system failures, or external events. RAROC is one
of several measures that is used to measure business unit compensation.

         The following tables reflect the condensed income statements, selected
average balance sheet items, and selected financial ratios, including changes
from the prior year, for each of our primary business units. The information
presented does not necessarily represent the business units' financial condition
and results of operations as if they were independent entities. Also, the table
has been expanded to include


                                       49


<PAGE>


performance center earnings. A performance center is a special unit whose income
generating activities, unlike typical profit centers, are based on other
business segment units' customer base. The revenues generated and expenses
incurred for those transactions entered into to accommodate our customers are
allocated to other business segments where the customer relationships reside. A
performance center's purpose is to foster cross-selling with a total
profitability view of the products and services it manages. For example, the
Securities Trading and Sales unit within the Global Markets Division, is a
performance center that manages the fixed income securities activities. Unlike
financial accounting, there is no authoritative body of guidance for management
accounting equivalent to US GAAP. Consequently, reported results are not
necessarily comparable with those presented by other companies.

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


                                       50


<PAGE>


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

<TABLE>
<CAPTION>

                                                 COMMUNITY BANKING                           COMMERCIAL
                                                   AND INVESTMENT                            FINANCIAL
                                                   SERVICES GROUP                          SERVICES GROUP
                                                   --------------                          --------------
                                                   AS OF THE THREE                        AS OF THE THREE
                                                       MONTHS          2005 VS. 2004          MONTHS             2005 VS. 2004
                                                 ENDED SEPTEMBER 30,  INCREASE/(DECREASE) ENDED SEPTEMBER 30, INCREASE/(DECREASE)
                                                 -------------------  ------------------- ------------------- -------------------
                                                  2004       2005      AMOUNT   PERCENT     2004      2005     AMOUNT   PERCENT
                                                  ----       ----      ------   -------     ----      ----     ------   -------
<S>                                              <C>        <C>        <C>          <C>  <C>       <C>        <C>          <C>
RESULTS OF OPERATIONS AFTER PERFORMANCE
  CENTER EARNINGS (DOLLARS IN THOUSANDS):
  Net interest income.........................   $197,024   $235,907   $38,883       20% $176,381  $227,476   $51,095       29%
  Noninterest income (expense)................    127,907    138,885    10,978        9    63,020    67,994     4,974        8
                                                 --------   --------   -------           --------  --------   -------
  Total revenue...............................    324,931    374,792    49,861       15   239,401   295,470    56,069       23
  Noninterest expense.........................    242,406    246,936     4,530        2   104,361   122,404    18,043       17
  Credit expense..............................      8,450      8,783       333        4    24,738    20,458   (4,280)      (17)
                                                 --------   --------   -------           --------  --------   -------
  Income from continuing operations before
    income taxes..............................     74,075    119,073    44,998       61   110,302   152,608    42,306       38
  Income tax expense..........................     28,334     45,545    17,211       61    35,233    51,493    16,260       46
                                                 --------   --------   -------           --------  --------   -------
  Income from continuing operations...........   $ 45,741   $ 73,528   $27,787       61  $ 75,069  $101,115   $26,046       35
  Income (loss) from discontinued operations,
    net of income taxes.......................         --         --        --       na        --        --        --       na
                                                 --------   --------   -------           --------  --------   -------
  Net income..................................   $ 45,741   $ 73,528   $27,787       61  $ 75,069  $101,115   $26,046       35
                                                 ========   ========   =======           ========  ========   =======
PERFORMANCE CENTER EARNINGS (DOLLARS IN
  THOUSANDS):
  Net interest income.........................   $     73   $    (50)  $  (123)    (168)%$    (47) $    (20)  $    27       57%
  Noninterest income..........................    (13,762)   (15,323)   (1,561)     (11)   10,447    11,858     1,411       14
  Noninterest expense.........................     (4,669)    (5,722)   (1,053)     (23)    4,063     4,919       856       21
  Income (loss) from continuing operations....     (9,110)    (9,811)     (701)      (8)    6,433     6,994       561        9
  Total loans (dollars in millions)...........         21         17        (4)     (19)     (42)       (42)       --       nm
AVERAGE BALANCES OF CONTINUING OPERATIONS
  (DOLLARS IN MILLIONS):
  Total loans(1)..............................   $ 13,105   $ 15,539   $ 2,434       19% $ 12,712  $ 16,391   $ 3,679       29%
  Total assets................................     14,508     17,062     2,554       18    15,383    19,995     4,612       30
  Total deposits(1)...........................     19,406     20,319       913        5    14,345    16,861     2,516       18
FINANCIAL RATIOS (ON A CONTINUING OPERATIONS):
Risk adjusted return on capital(2)............         25%        28%                          20%       23%
Return on average assets(2)...................       1.25       1.71                         1.94      2.01
Efficiency ratio(3)...........................      74.60      65.89                        43.59     41.43

</TABLE>

<TABLE>
<CAPTION>
                                                                                            UNIONBANCAL
                                                       OTHER                                CORPORATION
                                                       -----                                -----------
                                                   AS OF THE THREE                        AS OF THE THREE
                                                       MONTHS          2005 VS. 2004          MONTHS             2005 VS. 2004
                                                 ENDED SEPTEMBER 30,  INCREASE/(DECREASE) ENDED SEPTEMBER 30, INCREASE/(DECREASE)
                                                 -------------------  ------------------- ------------------- -------------------
                                                  2004       2005      AMOUNT   PERCENT     2004      2005     AMOUNT   PERCENT
                                                  ----       ----      ------   -------     ----      ----     ------   -------
<S>                                                <C>         <C>   <C>           <C>   <C>       <C>        <C>           <C>
RESULTS OF OPERATIONS AFTER PERFORMANCE
  CENTER EARNINGS (DOLLARS IN THOUSANDS):
  Net interest income.......................       $33,173  $   759  $(32,414)     (98)% $406,578  $464,142   $57,564       14%
  Noninterest income (expense)..............         6,193    5,309      (884)     (14)   197,120   212,188    15,068        8
                                                   -------  -------  --------            --------  --------   -------
  Total revenue.............................        39,366    6,068   (33,298)     (85)   603,698   676,330    72,632       12
  Noninterest expense.......................        12,809   27,356    14,547      114    359,576   396,696    37,120       10
  Credit expense............................       (44,127) (44,241)     (114)      nm    (10,939)  (15,000)   (4,061)     (37)
                                                   -------  -------  --------            --------  --------   -------
  Income from continuing operations before
    income taxes............................        70,684   22,953   (47,731)     (68)   255,061   294,634    39,573       16
  Income tax expense........................        34,554   (3,650)  (38,204)    (111)    98,121    93,388    (4,733)      (5)
                                                   -------  -------  --------            --------  --------   -------
  Income from continuing operations.........       $36,130  $26,603  $ (9,527)     (26)  $156,940  $201,246   $44,306       28
  Income (loss) from discontinued operations,
    net of income taxes.....................         6,498  (15,961)  (22,459)    (346)     6,498  (15,961)   (22,459)    (346)
                                                   -------  -------  --------            --------  --------   -------
  Net income................................       $42,628  $10,642  $(31,986)     (75)  $163,438  $185,285   $21,847       13
                                                   =======  =======  ========            ========  ========   =======
PERFORMANCE CENTER EARNINGS (DOLLARS IN
  THOUSANDS):
  Net interest income.......................       $   (26) $    70  $     96      369%  $     --  $     --   $    --       na
  Noninterest income........................         3,315    3,465       150        5         --        --        --       na
  Noninterest expense.......................           606      803       197       33         --        --        --       na
  Income (loss) from continuing operations..         2,677    2,817       140        5         --        --        --       na
  Total loans (dollars in millions).........            21       25         4       19         --        --        --       na
AVERAGE BALANCES OF CONTINUING OPERATIONS
  (DOLLARS IN MILLIONS):
  Total loans(1)............................       $   485  $   248  $   (237)     (49)% $ 26,302  $ 32,178   $ 5,876       22%
  Total assets..............................        13,582   11,155    (2,427)     (18)    43,473    48,212     4,739       11
  Total deposits(1).........................         2,187    3,114       927       42     35,938    40,294     4,356       12
FINANCIAL RATIOS (ON A CONTINUING OPERATIONS):
Risk adjusted return on capital(2)..........            na       na                            na        na
  Return on average assets(2)...............            na       na                          1.44%     1.66%
  Efficiency ratio(3).......................            na       na                         59.46     59.07
---------------
<FN>
(1)  Represents loans and deposits for each business segment after allocation
     between the segments of loans and deposits originated in one segment but
     managed by another segment.

(2)  Annualized.

(3)  The efficiency ratio is noninterest expense, excluding foreclosed asset
     expense (income) and provision for losses on off-balance sheet commitments,
     as a percentage of net interest income and noninterest income.

nm   = not meaningful

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


                                       51


<PAGE>


<TABLE>
<CAPTION>
                                                 COMMUNITY BANKING                           COMMERCIAL
                                                   AND INVESTMENT                            FINANCIAL
                                                   SERVICES GROUP                          SERVICES GROUP
                                                   --------------                          --------------
                                                    AS OF THE NINE                        AS OF THE NINE
                                                       MONTHS            2005 VS. 2004        MONTHS             2005 VS. 2004
                                                 ENDED SEPTEMBER 30,  INCREASE/(DECREASE) ENDED SEPTEMBER 30, INCREASE/(DECREASE)
                                                 -------------------  ------------------- ------------------- -------------------
                                                2004       2005       AMOUNT   PERCENT     2004      2005     AMOUNT   PERCENT
                                                ----       ----       ------   -------     ----      ----     ------   -------
<S>                                           <C>       <C>        <C>            <C>   <C>       <C>       <C>           <C>
RESULTS OF OPERATIONS AFTER PERFORMANCE
  CENTER EARNINGS (DOLLARS IN THOUSANDS):
  Net interest income......................   $553,095  $ 692,546    $139,451    25%    $495,870  $646,283  $150,413       30%
  Noninterest income (expense).............    379,818    410,391      30,573     8      202,629   206,445     3,816        2
                                              --------  ---------    --------            --------  --------  --------
  Total revenue............................    932,913  1,102,937     170,024    18      698,499   852,728   154,229       22
  Noninterest expense......................    695,739    763,189      67,450    10      311,470   346,525    35,055       11
  Credit expense...........................     24,134     25,423       1,289     5       82,443    65,500   (16,943)     (21)
                                              --------  ---------    --------            --------  --------  --------
  Income from continuing operations before
    income taxes...........................    213,040    314,325     101,285    48      304,586   440,703   136,117       45
  Income tax expense.......................     81,488    120,229      38,741    48       97,187   147,343    50,156       52
                                              --------  ---------    --------           --------  --------  --------
  Income from continuing operations........   $131,552  $ 194,096    $ 62,544    48     $207,399  $293,360  $ 85,961       41
  Income (loss) from discontinued
    operations, net of income taxes........         --         --          --    na           --        --        --       na
                                              --------  ---------    --------           --------  --------  --------
  Net income...............................   $131,552  $ 194,096    $ 62,544    48     $207,399  $293,360  $ 85,961       41
                                              ========  =========    ========           ========  ========  ========
PERFORMANCE CENTER EARNINGS (DOLLARS IN
  THOUSANDS):
  Net interest income......................   $    399  $     102    $   (297)  (74)    $   (286) $   (266) $     20        7
  Noninterest income.......................    (53,242)   (44,157)      9,085    17       42,337    34,095    (8,242)     (19)
  Noninterest expense......................    (24,764)   (16,413)      8,351    34       21,654    13,893    (7,761)     (36)
  Income (loss) from continuing operations.    (28,384)   (28,207)        177     1       20,611    20,303      (308)      (1)
  Total loans (dollars in millions)........         25         22          (3)  (12)         (44)      (49)       (5)     (11)
AVERAGE BALANCES OF CONTINUING OPERATIONS
  (DOLLARS IN MILLIONS):
  Total loans(1)...........................   $ 12,486  $  15,037    $  2,551    20     $ 12,314  $ 15,530  $  3,216       26
  Total assets.............................     13,846     16,499       2,653    19       14,685    18,928     4,243       29
  Total deposits(1)........................     19,150     20,342       1,192     6       14,022    15,761     1,739       12
FINANCIAL RATIOS (ON A CONTINUING
  OPERATIONS):
  Risk adjusted return on capital(2).......         24%        30%                            19%       24%
  Return on average assets(2)..............       1.27       1.57                           1.89      2.07
  Efficiency ratio(3)......................      74.58      69.20                          44.59     40.64

</TABLE>

<TABLE>
<CAPTION>
                                                                                            UNIONBANCAL
                                                       OTHER                                CORPORATION
                                                       -----                                -----------
                                                   AS OF THE NINE                        AS OF THE NINE
                                                       MONTHS            2005 VS. 2004        MONTHS             2005 VS. 2004
                                                 ENDED SEPTEMBER 30,  INCREASE/(DECREASE) ENDED SEPTEMBER 30, INCREASE/(DECREASE)
                                                 -------------------  ------------------- ------------------- -------------------
                                                 2004       2005      AMOUNT   PERCENT     2004       2005     AMOUNT   PERCENT
                                                 ----       ----      ------   -------     ----       ----     ------   -------
<S>                                           <C>         <C>       <C>          <C>   <C>         <C>        <C>           <C>
RESULTS OF OPERATIONS AFTER PERFORMANCE
  CENTER EARNINGS (DOLLARS IN THOUSANDS):
  Net interest income.....................    $147,280   $ 19,685   $(127,595)  (87)%  $1,196,245  $1,358,514 $162,269       14%
  Noninterest income (expense)............     117,987      4,531    (113,456)  (96)      700,434     621,367  (79,067)     (11)
                                              --------   --------   ---------          ----------  ---------- --------
  Total revenue...........................     265,267     24,216    (241,051)  (91)    1,896,679   1,979,881   83,202        4
  Noninterest expense.....................      77,542     68,334      (9,208)  (12)    1,084,751   1,178,048   93,297        9
  Credit expense..........................    (135,615)  (131,606)      4,009     3      (29,038)    (40,683) (11,645)     (40)
                                              --------   --------   ---------          ----------  ---------- --------
  Income from continuing operations before
    income taxes..........................     323,340     87,488    (235,852)  (73)      840,966     842,516    1,550       nm
  Income tax expense......................     130,314      6,469    (123,845)  (95)      308,989     274,041  (34,948)     (11)
                                              --------   --------   ---------          ----------  ---------- --------
  Income from continuing operations.......    $193,026   $ 81,019   $(112,007)  (58)   $  531,977  $  568,475 $ 36,498        7
  Income (loss) from discontinued
    operations, net of income taxes.......      20,045    (14,031)    (34,076) (170)       20,045    (14,031)  (34,076)    (170)
                                              --------   --------   ---------          ----------  ---------- --------
    Net income............................    $213,071   $ 66,988   $(146,083)  (69)   $  552,022  $  554,444 $  2,422       nm
                                              ========   ========   =========          ==========  ========== ========
PERFORMANCE CENTER EARNINGS (DOLLARS IN
  THOUSANDS):
  Net interest income.....................    $   (113)  $    164   $     277   245    $       --  $       -- $     --       na
  Noninterest income......................      10,905     10,062        (843)   (8)           --          --       --       na
  Noninterest expense.....................       3,110      2,520        (590)  (19)           --          --       --       na
  Income (loss) from continuing operations       7,773      7,904         131     2            --          --       --       na
  Total loans (dollars in millions).......          19         27           8    42            --          --       --       na
AVERAGE BALANCES OF CONTINUING OPERATIONS
  (DOLLARS IN MILLIONS):
  Total loans(1)..........................    $    528   $    276   $    (252)  (48)   $   25,328  $   30,843 $  5,515       22
  Total assets............................      13,794     11,916      (1,878)  (14)       42,325      47,343    5,018       12
  Total deposits(1).......................       2,223      3,202         979    44        35,395      39,305    3,910       11
FINANCIAL RATIOS (ON A CONTINUING
  OPERATIONS):
  Risk adjusted return on capital(2)......          na         na                              na          na
  Return on average assets(2).............          na         na                            1.68%       1.61%
  Efficiency ratio(3).....................          na         na                           57.09       59.74
---------------
<FN>
(1)  Represents loans and deposits for each business segment after allocation
     between the segments of loans and deposits originated in one segment but
     managed by another segment.

(2)  Annualized.

(3)  The efficiency ratio is noninterest expense, excluding foreclosed asset
     expense (income) and the provision for losses on off-balance sheet
     commitments, as a percentage of net interest income and noninterest income.

nm   = not meaningful

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


                                       52


<PAGE>


         COMMUNITY BANKING AND INVESTMENT SERVICES GROUP

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

         During the third quarter 2005, net income increased by 61 percent over
the same period in 2004, reflecting the group's continued focus on growing the
consumer asset portfolio and attracting retail and small business deposits.

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

         Total core deposit growth demonstrates the group's continued success in
attracting mass retail, affluent consumers and small business deposits through
marketing activities, relationship management, increased and improved sales
resources, new locations, and new products. These activities, in the aggregate,
have resulted in a year-over-year increase of approximately 5 percent in core
deposits. Among the more successful marketing activities has been the "Power
Bank" network, in Fresno, California and in the Central Coast region of
California. These branches offer an expanded set of service options, extended
hours and have been remodeled to improve the customer experience with facility
enhancements. We do not, however, intend to expand the "Power Bank" to
additional markets in 2005 until we better understand the return on our
investment in facilities and improved service. The focus on enterprise-wide
cross-sell has been particularly effective in our affluent market where a key
strategy of The Private Bank is to expand its business by leveraging existing
Bank client relationships.

         The largest portion of the 9 percent increase in noninterest income was
due to an increase in deposit fees and trust fees from the recently acquired
portfolios from CNA Trust (renamed TruSource) and the BTM Trust Company, New
York. Overall, total revenues for the third quarter 2005 increased by over 15
percent compared to the third quarter 2004.

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

         COMMUNITY BANKING serves its customers through 315 full-service
branches in California, 4 full-service branches in Oregon and Washington, and a
network of 596 proprietary ATMs. Customers may also access our services 24 hours
a day by telephone or through our WEBSITE at WWW.UBOC.COM. In addition, the
division offers automated teller and point-of-sale merchant services.

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

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

         o     through access to our internet banking services, which augment
               our physical delivery channels by providing an array of customer
               transaction, bill payment and loan payment services;
         o     through branches and business banking centers, which serve small
               businesses with annual sales up to $5 million; and

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


                                       53


<PAGE>


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

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

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

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

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

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

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

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

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


                                       54


<PAGE>


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

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

         COMMERCIAL FINANCIAL SERVICES GROUP

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

         In the third quarter 2005, the increase in net income was due to
significant growth in both loans and deposits. Net interest income increased by
29 percent due to higher demand deposits and a higher margin on deposits,
resulting in a $51 million improvement over the prior year. Deposit growth came
primarily from sales successes in middle market, corporate and real estate
industries. In addition to new sales, pricing strategies to retain volume helped
to offset the disintermediation associated with a rising interest rate
environment.

         Third quarter 2005 average loans increased by 29 percent over the same
period last year. This was primarily due to the acquisition of Jackson Federal
and continued improvement in our approach to the commercial real estate market.

         The increase in noninterest income was mainly due to gains on our
private capital portfolio, primarily offset by lower deposit fees due to an
increase in the earnings credit available to our wholesale customers. The
increase in noninterest expense during the third quarter 2005, compared to the
third quarter 2004, was mainly due to outside services expense from vendor bills
paid primarily for title and escrow customers.

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

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

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

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

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


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

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

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

         OTHER

         "Other" includes the following items:

         o     corporate activities that are not directly attributable to one of
               the two 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 funds transfer pricing results for the entire company, which
               allocates to the other business segments their cost of funds on
               all asset categories and credit for funds on all liability
               categories;

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

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

         o     the Pacific Rim Corporate Group, with assets of $250 million at
               September 30, 2005, which offers a range of credit, deposit, and
               investment management products and services to companies in the
               U.S., which are affiliated with companies headquartered in Japan;

         o     Corporate Treasury, which is responsible for our ALM, wholesale
               funding, and the investment and derivatives portfolios. These
               treasury management activities are carried out to counter-balance
               the residual risk positions of our core balance sheet and to
               manage those risks within conservative guidelines. (For
               additional discussion regarding these risk management activities,
               see "Quantitative and Qualitative Disclosures About Market
               Risk.")

         o     the discontinued operations resulting from the sale of most of
               our International Banking Group; and

         o     the residual costs of support groups.

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

         o     credit expense (income) of ($44.2) million was due to the
               difference between the $15.0 million reversal of provision for
               loan losses calculated under our US GAAP methodology and the
               $29.2 million in expected losses for the reportable business
               segments, which utilizes the RAROC methodology;

         o     net interest income included the result of differences between
               the credit for equity for the reportable segments under RAROC and
               the net interest income earned by UnionBanCal


                                       56


<PAGE>


               Corporation, a credit for deposits in the Pacific Rim Corporate
               Group and transfer pricing results. Net interest income declined
               $32.4 million compared to the three months ended September 30,
               2004 primarily as a result of a decrease in income from ALM
               derivatives hedges and from the net impact of changes in transfer
               pricing rates over prior period as market rates increased;

         o     noninterest income of $5.3 million;

         o     noninterest expense of $27.4 million, included increased
               corporate benefits and performance related incentives;

         o     loss from discontinued operations of $16.0 million.

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

         o     credit expense (income) of ($44.1) million was due to the
               difference between the $10.9 million reversal in provision for
               loan losses calculated under our US GAAP methodology and the
               $33.2 million in expected losses for the reportable business
               segments, which utilizes the RAROC methodology;

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

         o     noninterest income of $6.2 million;

         o     noninterest expense of $12.8 million; and

         o     income from discontinued operations of $6.5 million.

         The following discusses the significant changes in "Other" between the
nine months ended September 30, 2004 and 2005.

         o     the decline in net interest income primarily as a result of the
               decrease of hedge income and the impact of changes in transfer
               pricing rates

         o     the recognition of a $93 million gain from the sale of our
               merchant card portfolio which occurred in 2004.

REGULATORY MATTERS

         On October 18, 2004, Union Bank of California International entered
into a written agreement with the Federal Reserve Bank of New York requiring
Union Bank of California International to strenghten its Bank Secrecy Act and
anti-money laundering controls and processes. Union Bank of California
International is wholly-owned by Union Bank of California, N.A., which is
wholly-owned by UnionBanCal Corporation. Union Bank of California International
is headquartered in New York City and, as an Edge Act subsidiary, is limited to
engaging in international banking activities, most of which have been sold. We
expect to dissolve this subsidiary in the second quarter 2006. Although the
principal business activities of Union Bank of California International were
sold to Wachovia Bank, N.A. on October 6, 2005, we remain legally responsible
and committed to resolving the issues raised by the regulators and continue to
take action aimed at resolving these matters.

         On March 23, 2005, Union Bank of California, N.A. entered into a
memorandum of understanding with the Office of the Comptroller of the Currency,
its principal regulator, which requires Union Bank of California, N.A. to
strengthen its Bank Secrecy Act and anti-money laundering controls and
processes.

         These regulatory matters may adversely affect UnionBanCal Corporation's
and Union Bank of California, N.A.'s ability to obtain regulatory approvals for
future initiatives requiring regulatory approval,


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<PAGE>


including acquisitions. However, neither this effect, the regulatory agreements,
nor the financial impact of enhanced Bank Secrecy Act and anti-money laundering
controls and processes, are expected to have a material adverse impact on the
financial condition or results of operations of Union Bank of California, N.A.
or UnionBanCal Corporation.

FACTORS THAT MAY AFFECT FUTURE RESULTS

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

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

         o     Pending legal and regulatory actions

         o     Credit quality and provision for credit losses

         o     Net interest income including income from derivative hedges

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

         o     The impact of strategic investments on our business

         o     The unallocated portion of our allowance for credit losses

         o     Our sensitivity to changes in interest rates

         o     The asset sensitivity of our balance sheet

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

         o     Future legislative and regulatory developments

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

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

         o     Potential dividend restrictions

         o     Integration of acquired companies

         o     Impact of the sale of our international correspondent banking
               business

         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


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control or predict and could have a material adverse effect on our stock price,
financial condition, and results of operations or prospects. Such risks and
uncertainties include, but are not limited to those listed below in "Industry
Factors" and "Company Factors."

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

INDUSTRY FACTORS

         FLUCTUATIONS IN INTEREST RATES COULD ADVERSELY AFFECT OUR BUSINESS

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

         FLUCTUATIONS IN INTEREST RATES COULD ADVERSELY AFFECT OUR MARGIN SPREAD

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

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

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

         SUBSTANTIAL COMPETITION COULD ADVERSELY AFFECT US

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


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<PAGE>


         Adverse effects of, or changes in, banking or other laws and
regulations or governmental fiscal or monetary policies could adversely affect
us

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

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

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

         CHANGES IN ACCOUNTING STANDARDS COULD MATERIALLY IMPACT OUR FINANCIAL
STATEMENTS

         From time to time the Financial Accounting Standards Board, the SEC and
bank regulators change the financial accounting and reporting standards that
govern the preparation of our financial statements. These changes can be very
difficult to predict and can materially impact how we record and report our
financial condition and results of operations. In some cases, we could be
required to apply a new or revised standard retroactively, resulting in our
restating prior period financial statements.

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

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


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COMPANY FACTORS

         ADVERSE CALIFORNIA ECONOMIC CONDITIONS COULD ADVERSELY AFFECT OUR
BUSINESS

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

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

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

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

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

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

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


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the Board would not have a majority of independent directors. The Bank of
Tokyo-Mitsubishi, Ltd.'s ability to prevent an unsolicited bid for us or any
other change in control could also have an adverse effect on the market price
for our common stock.

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

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

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

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

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

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

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

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


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

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

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

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

         PRIVACY RESTRICTIONS COULD ADVERSELY AFFECT OUR BUSINESS

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

         WE RELY ON THIRD PARTIES FOR IMPORTANT PRODUCTS AND SERVICES

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

         SIGNIFICANT LEGAL ACTIONS COULD SUBJECT US TO SUBSTANTIAL UNINSURED
LIABILITIES

         We are from time to time subject to claims related to our operations.
These claims and legal actions, including supervisory actions by our regulators,
could involve large monetary claims and significant defense costs. To protect
ourselves from the cost of these claims, we maintain insurance coverage in
amounts and with deductibles that we believe are appropriate for our operations.
However, our insurance coverage may


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not cover all claims against us or continue to be available to us at a
reasonable cost. As a result, we may be exposed to substantial uninsured
liabilities, which could adversely affect our business, prospects, results of
operations and financial condition.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

ITEM 4.  CONTROLS AND PROCEDURES

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

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


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                           PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

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

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

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

         REPURCHASES OF EQUITY SECURITIES

         We did not repurchase any of our equity securities during the third
quarter 2005. The dollar value of shares that may yet be purchased under our
repurchase programs is $162,078,928.

ITEM 6.  EXHIBITS

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

10.1  Purchase and Assumption Agreement by and among Union Bank of California
      N.A., Union Bank of California International, and Union Bank of California
      Servicos LTDA. and Wachovia Bank, N.A. dated September 21, 2005(1)

10.2  Written Description of Compensation Arrangement for UnionBanCal
      Corporation Non-Employee Directors(2)

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

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

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

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

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


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<PAGE>


                                   SIGNATURES


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


                                    UNIONBANCAL CORPORATION
                                    (Registrant)

Date:  November 8, 2005             By: /s/ TAKASHI MORIMURA
                                       ----------------------------------------
                                                   Takashi Morimura
                                         PRESIDENT AND CHIEF EXECUTIVE OFFICER
                                             (Principal Executive Officer)


Date:  November 8, 2005             By: /s/ DAVID I. MATSON
                                       ----------------------------------------
                                                   David I. Matson
                                                  VICE CHAIRMAN AND
                                               CHIEF FINANCIAL OFFICER
                                             (Principal Financial Officer)


Date:  November 8, 2005             By: /s/ DAVID A. ANDERSON
                                       ----------------------------------------
                                                 David A. Anderson
                                        SENIOR VICE PRESIDENT AND CONTROLLER
                                            (Chief Accounting Officer)


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