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

                                  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, 2001

                         Commission file number 0-28118

                             UnionBanCal Corporation

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

                              400 CALIFORNIA STREET
                      SAN FRANCISCO, CALIFORNIA 94104-1302

                  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

  Number of shares of Common Stock outstanding at October 31, 2001: 156,871,624

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

<PAGE>
<TABLE>
<CAPTION>

                    UNIONBANCAL CORPORATION AND SUBSIDIARIES

                                TABLE OF CONTENTS




                                                                                                   PAGE
                                                                                                  NUMBER
<S>                                                                                                 <C>
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 Shareholders' Equity.......................   6
      Condensed Consolidated Statements of Cash Flows............................................   7
      Notes to Condensed Consolidated Financial Statements.......................................   8
   Item 2. Management's Discussion and Analysis:
      Introduction...............................................................................  15
      Summary....................................................................................  16
      Business Segments..........................................................................  19
      Net Interest Income........................................................................  28
      Noninterest Income.........................................................................  31
      Noninterest Expense........................................................................  33
      Income Tax Expense.........................................................................  34
      Loans......................................................................................  35
      Cross-border Outstandings..................................................................  36
      Provision for Credit Losses................................................................  36
      Allowance for Credit Losses................................................................  37
      Nonperforming Assets.......................................................................  41
      Loans 90 Days or More Past Due and Still Accruing..........................................  42
      Liquidity..................................................................................  42
      Regulatory Capital.........................................................................  43
      Certain Business Risk Factors..............................................................  44
   Item 3. Market Risk...........................................................................  48
PART II
   OTHER INFORMATION
   Item 4. Other Information.....................................................................  49
   Item 6. Exhibits and Reports on Form 8-K......................................................  49
Signatures.......................................................................................  50
</TABLE>


<PAGE>


                         PART I. FINANCIAL INFORMATION

<TABLE>
<CAPTION>

                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
                        CONSOLIDATED FINANCIAL HIGHLIGHTS
                                   (UNAUDITED)

                                                                                                          PERCENT CHANGE TO
                                                       FOR THE THREE MONTHS ENDED                      SEPTEMBER 30, 2001 FROM:
                                              -------------------------------------------------      -----------------------------
                                              SEPTEMBER 30,        JUNE 30,        SEPTEMBER 30,   SEPTEMBER 30,        JUNE 30,
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)    2000               2001               2001            2000               2001
--------------------------------------------  -----------        ------------       -----------      ---------        ------------
<S>                                           <C>                <C>                <C>              <C>                <C>
RESULTS OF OPERATIONS:
   Net interest income(1)............         $   404,626        $   379,313        $   378,517          (6.45)%           (0.21)%
   Provision for credit losses.......              80,000             65,000             50,000         (37.50)           (23.28)
   Noninterest income................             168,928            168,391            173,405           2.65              2.98
   Noninterest expense...............             291,378            307,452            317,042           8.81              3.12
                                              -----------        -----------        -----------
   Income before income taxes(1).....             202,176            175,252            184,880          (8.55)             5.49
   Taxable-equivalent adjustment.....                 641                590                426         (33.54)           (27.80)
   Income tax expense................              69,959             57,512             59,325         (15.20)             3.15
                                              -----------        -----------        -----------
   Net income........................         $   131,576        $   117,150        $   125,129          (4.90)%            6.81%
                                              ===========        ===========        ===========


PER COMMON SHARE:
   Net income--basic..................        $      0.82        $      0.74        $      0.79          (3.66)%            6.76%
   Net income--diluted................               0.82               0.74               0.79          (3.66)             6.76
   Dividends(2).......................               0.25               0.25               0.25             --                --
   Book value (end of period)........               20.13              21.37              22.49          11.72              5.24
   Common shares outstanding (end of
      period)........................         160,112,869        157,839,218        157,181,483          (1.83)            (0.42)
   Weighted average common shares
      outstanding--basic..............        160,759,916        158,180,799        157,584,675          (1.98)            (0.38)
   Weighted average common shares
      outstanding--diluted............        161,014,901        158,881,633        159,028,898          (1.23)             0.09
BALANCE SHEET (END OF PERIOD):
   Total assets......................         $33,745,489        $35,758,632        $35,239,224           4.43%            (1.45)%
   Total loans.......................          26,157,939         25,656,247         25,594,289          (2.15)            (0.24)
   Nonaccrual loans..................             282,999            453,422            444,519          57.07             (1.96)
   Nonperforming assets..............             299,795            460,116            450,246          50.18             (2.15)
   Total deposits....................          25,894,059         27,700,624         27,065,423           4.52             (2.29)
   Subordinated capital notes........             200,000            200,000            200,000             --               --
   Trust preferred securities........             350,000            364,269            369,441           5.55              1.42
   Common equity.....................           3,222,770          3,373,564          3,534,533           9.67              4.77
BALANCE SHEET (PERIOD AVERAGE):
   Total assets......................         $33,690,070        $34,589,322        $34,616,940           2.75%             0.08%
   Total loans.......................          26,454,975         26,114,389         25,917,100          (2.03)            (0.76)
   Earning assets....................          30,399,146         31,272,909         31,343,059           3.11              0.22
   Total deposits....................          25,402,036         26,641,335         26,391,293           3.89             (0.94)
   Common equity.....................           3,185,167          3,406,324          3,497,664           9.81              2.68
FINANCIAL RATIOS:
   Return on average assets(3).......                1.55%              1.36%              1.43%
   Return on average common equity(3)               16.43              13.79              14.19
   Efficiency ratio(4)...............               50.80              56.13              57.45
   Net interest margin(1)............                5.30               4.86               4.81
   Dividend payout ratio.............               30.49              33.78              31.65
   Tangible equity ratio.............                9.41               9.30               9.91
   Tier 1 risk-based capital ratio...               10.52              10.85              11.18
   Total risk-based capital ratio....               12.35              12.70              13.05
   Leverage ratio....................               10.47              10.33              10.50
   Allowance for credit losses to
      total loans....................                2.01               2.44               2.46
   Allowance for credit losses to
      nonaccrual loans...............              185.83             138.18             141.65
   Net loans charged off to average
      total loans(3).................                0.82               1.24               0.72
   Nonperforming assets to total
      loans, distressed loans held
      for sale, and foreclosed assets                1.15               1.79               1.76
   Nonperforming assets to total
      assets.........................                0.89               1.29               1.28


-----------
<FN>
(1)      Amounts are on a taxable-equivalent basis using the federal statutory
         tax rate of 35 percent.
(2)      Dividends per share reflect dividends declared on UnionBanCal
         Corporation's common stock outstanding as of the declaration date.
(3)      Annualized.
(4)      The efficiency ratio is noninterest expense, excluding foreclosed asset
         expense (income), as a percentage of net interest income
         (taxable-equivalent) and noninterest income.
</FN>
</TABLE>

                                       2

<PAGE>

<TABLE>
<CAPTION>

                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
                  CONSOLIDATED FINANCIAL HIGHLIGHTS (CONTINUED)
                                   (UNAUDITED)


                                                                                             AS OF AND FOR THE
                                                                                             NINE MONTHS ENDED
                                                                                 ------------------------------------------------
                                                                                 SEPTEMBER 30,        SEPTEMBER 30,    PERCENT
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)                                         2000                 2001         CHANGE
----------------------------------------------------------------------------     -------------        -------------    ----------
<S>                                                                               <C>                  <C>               <C>
RESULTS OF OPERATIONS:
   Net interest income(1)...................................................      $  1,187,732         $  1,145,713        (3.54)%
   Provision for credit losses..............................................           190,000              215,000        13.16
   Noninterest income.......................................................           494,008              522,603         5.79
   Noninterest expense, excluding restructuring credit......................           848,735              931,979         9.81
   Restructuring credit.....................................................           (19,000)                  --      (100.00)
                                                                                  ------------         ------------
   Income before income taxes(1)............................................           662,005              521,337       (21.25)
   Taxable-equivalent adjustment............................................             1,933                1,638       (15.26)
   Income tax expense.......................................................           228,610              170,133       (25.58)
                                                                                  ------------         ------------
   Net income...............................................................      $    431,462         $    349,566       (18.98)%
                                                                                  ============         ============
PER COMMON SHARE:
   Net income--basic.........................................................     $       2.66         $       2.21       (16.92)%
   Net income--diluted.......................................................             2.65                 2.20       (16.98)
   Dividends(2).............................................................              0.75                 0.75           --
   Book value (end of period)...............................................             20.13                22.49        11.72
   Common shares outstanding (end of period)................................       160,112,869          157,181,483        (1.83)
   Weighted average common shares outstanding--basic.........................      162,259,396          158,214,813        (2.49)
   Weighted average common shares outstanding--diluted.......................      162,674,610          158,916,432        (2.31)
BALANCE SHEET (END OF PERIOD):
   Total assets.............................................................      $ 33,745,489         $ 35,239,224         4.43%
   Total loans..............................................................        26,157,939           25,594,289        (2.15)
   Nonaccrual loans.........................................................           282,999              444,519        57.07
   Nonperforming assets.....................................................           299,795              450,246        50.18
   Total deposits...........................................................        25,894,059           27,065,423         4.52
   Subordinated capital notes...............................................           200,000              200,000           --
   Trust preferred securities...............................................           350,000              369,441         5.55
   Common equity............................................................         3,222,770            3,534,533         9.67
BALANCE SHEET (PERIOD AVERAGE):
   Total assets.............................................................      $ 33,520,179         $ 34,545,443         3.06%
   Total loans..............................................................        26,303,921           26,147,872        (0.59)
   Earning assets...........................................................        30,267,580           31,229,078         3.18
   Total deposits...........................................................        25,320,107           26,269,050         3.75
   Common equity............................................................         3,095,375            3,414,561        10.31
FINANCIAL RATIOS:
   Return on average assets(3)..............................................              1.72%                1.35%
   Return on average common equity(3).......................................             18.62                13.69
   Efficiency ratio(4)......................................................             49.34                55.86
   Net interest margin(1)...................................................              5.23                 4.90
   Dividend payout ratio....................................................             28.20                33.94
   Tangible equity ratio....................................................              9.41                 9.91
   Tier 1 risk-based capital ratio..........................................             10.52                11.18
   Total risk-based capital ratio...........................................             12.35                13.05
   Leverage ratio...........................................................             10.47                10.50
   Allowance for credit losses to total loans...............................              2.01                 2.46
   Allowance for credit losses to nonaccrual loans..........................            185.83               141.65
   Net loans charged off to average total loans(3)..........................              0.68                 1.02
   Nonperforming assets to total loans, distressed loans held for sale, and
      foreclosed assets.....................................................              1.15                 1.76
   Nonperforming assets to total assets.....................................              0.89                 1.28


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

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

(3)      Annualized.

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


                                       3

<PAGE>

ITEM 1.  FINANCIAL STATEMENTS

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



                                                                          FOR THE THREE MONTHS         FOR THE NINE MONTHS ENDED
                                                                           ENDED SEPTEMBER 30,                 SEPTEMBER 30,
                                                                        -------------------------      --------------------------
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)                             2000             2001           2000            2001
-----------------------------------------------------------------       --------         --------      ----------      ----------
<S>                                                                     <C>              <C>           <C>             <C>
INTEREST INCOME
   Loans.........................................................       $576,567         $455,477      $1,675,900      $1,478,894
   Securities....................................................         55,706           76,852         162,689         215,370
   Interest bearing deposits in banks............................          2,775              622           7,522           2,249
   Federal funds sold and securities purchased under resale
      agreements.................................................          1,263            1,398           6,364           4,585
   Trading account assets........................................          4,170            1,652          12,205           6,716
                                                                        --------         --------      ----------      ----------
      Total interest income......................................        640,481          536,001       1,864,680       1,707,814
                                                                        --------         --------      ----------      ----------
INTEREST EXPENSE
   Domestic deposits.............................................        144,406          105,851         410,625         366,394
   Foreign deposits..............................................         25,506           15,954          76,872          60,944
   Federal funds purchased and securities sold under repurchase
      agreements.................................................         26,994           12,265          72,383          48,687
   Commercial paper..............................................         26,072           11,844          71,004          46,882
   Subordinated capital notes....................................          4,060            2,142          13,997           7,873
   UnionBanCal Corporation--obligated mandatorily redeemable
      preferred securities of subsidiary grantor trust...........          6,414            4,940          19,788          16,329
   Other borrowed funds..........................................          3,044            4,914          14,212          16,630
                                                                        --------         --------      ----------      ----------
      Total interest expense.....................................        236,496          157,910         678,881         563,739
                                                                        --------         --------      ----------      ----------
NET INTEREST INCOME..............................................        403,985          378,091       1,185,799       1,144,075
   Provision for credit losses...................................         80,000           50,000         190,000         215,000
                                                                        --------         --------      ----------      ----------
      Net interest income after provision for credit losses......        323,985          328,091         995,799         929,075
                                                                        --------         --------      ----------      ----------
NONINTEREST INCOME
   Service charges on deposit accounts...........................         53,779           62,742         153,987         181,614
   Trust and investment management fees..........................         39,975           37,965         116,163         116,880
   Merchant transaction processing fees..........................         19,354           21,315          54,887          60,814
   International commissions and fees............................         18,012           18,053          53,463          53,288
   Brokerage commissions and fees................................          8,616            8,786          27,309          26,764
   Merchant banking fees.........................................         15,353            7,742          40,681          26,671
   Securities gains (losses), net................................          3,104           (1,699)          8,804           4,318
   Other.........................................................         10,735           18,501          38,714          52,254
                                                                        --------         --------      ----------      ----------
      Total noninterest income...................................        168,928          173,405         494,008         522,603
                                                                        --------         --------      ----------      ----------
NONINTEREST EXPENSE
   Salaries and employee benefits................................        152,227          171,172         444,483         500,243
   Net occupancy.................................................         24,664           23,779          69,358          70,375
   Equipment.....................................................         15,702           16,985          47,706          48,252
   Merchant transaction processing...............................         12,784           13,324          37,144          39,687
   Communications................................................         11,736           13,074          33,048          36,582
   Professional services.........................................         10,760            9,982          29,278          29,155
   Data processing...............................................          8,577            8,885          26,199          26,935
   Foreclosed asset expense (income).............................            (14)             (60)              7               1
   Restructuring credit..........................................             --               --         (19,000)             --
   Other.........................................................         54,942           59,901         161,512         180,749
                                                                        --------         --------      ----------      ----------
      Total noninterest expense..................................        291,378          317,042         829,735         931,979
                                                                        --------         --------      ----------      ----------
   Income before income taxes....................................        201,535          184,454         660,072         519,699
   Income tax expense............................................         69,959           59,325         228,610         170,133
                                                                        --------         --------      ----------      ----------
NET INCOME.......................................................       $131,576         $125,129      $  431,462      $  349,566
                                                                        ========         ========      ==========      ==========
NET INCOME PER COMMON SHARE--BASIC................................      $   0.82         $   0.79      $     2.66      $     2.21
                                                                        ========         ========      ==========      ==========
NET INCOME PER COMMON SHARE--DILUTED..............................      $   0.82         $   0.79      $     2.65      $     2.20
                                                                        ========         ========      ==========      ==========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING--BASIC.................       160,760          157,585         162,259         158,215
                                                                        ========         ========      ==========      ==========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING--DILUTED...............       161,015          159,029         162,675         158,916
                                                                        ========         ========      ==========      ==========
</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)                                                            2000               2000                2001
-----------------------------------------------------------------------      ------------        ------------       -------------
<S>                                                                           <C>                <C>                 <C>
ASSETS
Cash and due from banks................................................       $ 2,133,958        $ 2,957,103         $ 2,577,510
Interest bearing deposits in banks.....................................           142,106             73,936              73,394
Federal funds sold and securities purchased under resale agreements....           236,600            291,940             514,600
                                                                              -----------        -----------         -----------
   Total cash and cash equivalents.....................................         2,512,664          3,322,979           3,165,504
Trading account assets.................................................           224,063            339,695             335,617
Securities available for sale:
   Securities pledged as collateral....................................                --            593,686             135,355
   Held in portfolio...................................................         3,588,360          3,533,984           4,719,724
Securities held to maturity (market value: September 30, 2000, $23,469;
   December 31, 2000, $23,302).........................................            24,173             23,529                  --
Loans (net of allowance for credit losses: September 30, 2000,
   $525,896; December 31, 2000, $613,902; September 30, 2001, $629,683)        25,632,043         25,396,496          24,964,606
Due from customers on acceptances......................................           255,325            268,116             188,020
Premises and equipment, net............................................           426,166            474,279             489,176
Other assets...........................................................         1,082,695          1,209,711           1,241,222
                                                                              -----------        -----------         -----------
   Total assets........................................................       $33,745,489        $35,162,475         $35,239,224
                                                                              ===========        ===========         ===========

LIABILITIES
Domestic deposits:
   Noninterest bearing.................................................       $ 9,971,158        $10,916,710         $11,256,740
   Interest bearing....................................................        13,723,799         13,986,774          13,536,139
Foreign deposits:
   Noninterest bearing.................................................           288,612            323,783             342,189
   Interest bearing....................................................         1,910,490          2,055,916           1,930,355
                                                                              -----------        -----------         -----------
   Total deposits......................................................        25,894,059         27,283,183          27,065,423
Federal funds purchased and securities sold under repurchase agreements         1,234,541          1,387,667           1,286,730
Commercial paper.......................................................         1,471,815          1,385,771           1,114,527
Other borrowed funds...................................................           274,348            249,469             535,976
Acceptances outstanding................................................           255,325            268,116             188,020
Other liabilities......................................................           842,631            826,704             944,574
Subordinated capital notes.............................................           200,000            200,000             200,000
UnionBanCal Corporation--obligated mandatorily redeemable preferred
   securities of subsidiary grantor trust..............................           350,000            350,000             369,441
                                                                              -----------        -----------         -----------
   Total liabilities...................................................        30,522,719         31,950,910          31,704,691
                                                                              -----------        -----------         -----------
Commitments and contingencies
SHAREHOLDERS' EQUITY
Preferred stock:
   Authorized 5,000,000 shares, no shares issued or outstanding as of
      September 30, 2000, December 31, 2000, and September 30, 2001....                --                 --                  --
Common stock--no stated value:
   Authorized 300,000,000 shares, issued 160,112,869 shares as of September
       30, 2000, 159,234,454 shares as of December 31, 2000,
      and 157,181,483 shares as of September 30, 2001..................         1,294,893          1,275,587           1,207,312
Retained earnings......................................................         1,936,827          1,906,093           2,137,956
Accumulated other comprehensive income (loss)..........................           (8,950)             29,885             189,265
                                                                              -----------        -----------         -----------
   Total shareholders' equity..........................................         3,222,770          3,211,565           3,534,533
                                                                              -----------        -----------         -----------
   Total liabilities and shareholders' equity..........................       $33,745,489        $35,162,475         $35,239,224
                                                                              ===========        ===========         ===========
</TABLE>

     See accompanying notes to condensed consolidated financial statements.


                                       5
<PAGE>

<TABLE>
<CAPTION>

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



                                                                                 FOR THE NINE MONTHS ENDED SEPTEMBER 30,
                                                                          -----------------------------------------------------
(DOLLARS IN THOUSANDS)                                                              2000                           2001
-----------------------------------------------------------------------   -----------------------       -----------------------
<S>                                                                       <C>            <C>            <C>            <C>
COMMON STOCK
   Balance, beginning of period........................................   $1,404,155                    $1,275,587
   Dividend reinvestment plan..........................................           39                            32
   Deferred compensation--restricted stock awards......................          247                           196
   Stock options exercised.............................................        1,652                         9,363
   Common stock repurchased............................................     (111,200)                      (77,866)
                                                                          ----------                    ----------
      Balance, end of period...........................................   $1,294,893                    $1,207,312
                                                                          ----------                    ----------
RETAINED EARNINGS
   Balance, beginning of period........................................   $1,625,263                    $1,906,093
   Net income..........................................................      431,462     $431,462          349,566     $349,566
   Dividends on common stock(1)........................................     (121,402)                     (118,593)
   Deferred compensation--restricted stock awards......................        1,504                           890
                                                                          ----------                    ----------
      Balance, end of period...........................................   $1,936,827                    $2,137,956
                                                                          ----------                    ----------
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
   Balance, beginning of period........................................   $  (41,950)                   $   29,885
   Cumulative effect of accounting change (SFAS No.133)(2), net of tax
      expense of $13,754...............................................                        --                        22,205
   Unrealized net gains on cash flow hedges, net of tax expense of
      $45,793 in the first nine months of 2001.........................                        --                        73,928
   Less: reclassification adjustment for net gains on cash flow hedges
      included in net income, net of tax expense of $10,751 in the
      first nine months of 2001........................................                        --                       (17,356)
                                                                                         --------                      --------
   Net unrealized gains on cash flow hedges............................                        --                        56,572
   Unrealized holding gains arising during the period on securities
      available for sale, net of tax expense of $23,587 and $51,996 in
      the first nine months of 2000 and 2001, respectively.............                    38,078                        83,941
   Less: reclassification adjustment for gains on securities available
      for sale included in net income, net of tax expense of $3,368 and
      $1,652 in the first nine months of 2000 and 2001, respectively...                    (5,436)                       (2,666)
                                                                                         --------                      --------
   Net unrealized gains on securities available for sale...............                    32,642                        81,275
   Foreign currency translation adjustment, net of tax expense
      (benefit) of $222 and $(416) in the first nine months of 2000 and
      2001, respectively...............................................                       358                          (672)
                                                                                         --------                      --------
   Other comprehensive income..........................................       33,000       33,000          159,380      159,380
                                                                          ----------     --------       ----------     --------
   Total comprehensive income..........................................                  $464,462                      $508,946
                                                                                         ========                      ========


      Balance, end of period...........................................   $   (8,950)                   $  189,265
                                                                          ----------                    ----------
        TOTAL SHAREHOLDERS' EQUITY.....................................   $3,222,770                    $3,534,533
                                                                          ==========                    ==========
-----------
<FN>
(1)      Dividends per share were $0.75 for the first nine months of 2000 and
         2001. Dividends are based on UnionBanCal Corporation's shares
         outstanding as of the declaration date.

(2)      Statement of Financial Accounting Standards No. 133, "Accounting For
         Derivative Instruments and Hedging Activities"
</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)                                                                                2000              2001
--------------------------------------------------------------------------------------------     ------------       ------------
<S>                                                                                              <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income...............................................................................     $    431,462       $    349,566
   Adjustments to reconcile net income to net cash provided by operating activities:
      Provision for credit losses...........................................................          190,000            215,000
      Depreciation, amortization and accretion..............................................           53,862             60,471
      Provision for deferred income taxes...................................................          (28,431)            34,479
      Gain on sales of securities available for sale........................................           (8,804)            (4,318)
      Utilization in excess of restructuring charge.........................................          (46,772)            (9,536)
      Net decrease (increase) in trading account assets.....................................          (44,128)             4,078
      Other, net............................................................................           56,786             91,095
                                                                                                 ------------       ------------
      Total adjustments.....................................................................          172,513            391,269
                                                                                                 ------------       ------------
   Net cash provided by operating activities................................................          603,975            740,835
                                                                                                 ------------       ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Proceeds from sales of securities available for sale.....................................          393,869            657,703
   Proceeds from matured and called securities available for sale...........................          725,459            636,208
   Purchases of securities available for sale...............................................       (1,434,439)        (1,858,667)
   Proceeds from matured and called securities held to maturity.............................           22,359                 --
   Net decrease (increase) in loans.........................................................         (390,627)           224,002
   Purchases of premises and equipment......................................................          (50,172)           (70,353)
   Other, net...............................................................................            3,686              2,606
                                                                                                 ------------       ------------
      Net cash used in investing activities.................................................         (729,865)          (408,501)
                                                                                                 ------------       ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Net decrease in deposits.................................................................         (362,548)          (217,760)
   Net increase (decrease) in federal funds purchased and securities sold under repurchase
      agreements............................................................................           77,742           (100,937)
   Net increase in commercial paper and other borrowed funds................................           97,409             15,263
   Common stock repurchased.................................................................         (111,200)           (77,866)
   Repayment of subordinated debt...........................................................          (98,000)                --
   Payments of cash dividends...............................................................         (122,556)          (119,005)
   Other, net...............................................................................            2,049             28,164
                                                                                                 ------------       ------------
      Net cash used in financing activities.................................................         (517,104)          (472,141)
                                                                                                 ------------       ------------
Net decrease in cash and cash equivalents...................................................         (642,994)          (139,807)
Cash and cash equivalents at beginning of period............................................        3,158,133          3,322,979
Effect of exchange rate changes on cash and cash equivalents................................           (2,475)           (17,668)
                                                                                                 ------------       ------------
Cash and cash equivalents at end of period..................................................     $  2,512,664       $  3,165,504
                                                                                                 ============       ============

CASH PAID DURING THE PERIOD FOR:
   Interest.................................................................................     $    667,649       $    618,076
   Income taxes.............................................................................          179,581             96,274
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
   Loans transferred to foreclosed assets (OREO) and/or distressed loans held for sale......     $     21,875       $      6,611
   Securities transferred from held to maturity to available for sale.......................               --             23,529
   Dividends declared but unpaid............................................................           40,018             39,363
</TABLE>


     See accompanying notes to condensed consolidated financial statements.


                                       7

<PAGE>


                    UNIONBANCAL CORPORATION AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2001
                                   (UNAUDITED)



NOTE 1--BASIS OF PRESENTATION AND NATURE OF OPERATIONS

         The   unaudited   condensed   consolidated   financial   statements  of
UnionBanCal  Corporation  and  subsidiaries  (the Company) have been prepared in
accordance with accounting principles generally accepted in the United States of
America (US GAAP) for interim  financial  reporting and the instructions to Form
10-Q and Rule  10-01 of  Regulation  S-X of the  Rules  and  Regulations  of the
Securities  and  Exchange  Commission.  However,  they do not include all of the
disclosures  necessary for annual  financial  statements  in conformity  with US
GAAP. The results of operations for the period ended  September 30, 2001 are not
necessarily  indicative of the operating results  anticipated for the full year.
Accordingly,  these unaudited condensed consolidated financial statements should
be read in  conjunction  with  the  audited  consolidated  financial  statements
included in the Company's  Form 10-K for the year ended  December 31, 2000.  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.

         In July 2000 and April 2001,  the Company  announced  stock  repurchase
plans of $100 million each. The Company  repurchased $69 million in common stock
between July 2000 and March 2001, $25 million  between April 2001 and June 2001,
and $31 million  between July 2001 and September 2001. As of September 30, 2001,
$75 million of common stock repurchases  authorized is available for repurchase.
At September 30, 2001, The Bank of Tokyo-Mitsubishi, Ltd. (BTM) owned 67 percent
of UnionBanCal Corporation.

         On January 1, 2000, the Company changed the method it uses to calculate
the market-related  value of its pension plan assets.  This change increased the
value of plan assets on which the  expected  returns  are based and,  therefore,
results in lower net periodic pension cost. This change in methodology  resulted
in a one-time  credit to salaries and employee  benefits of $16.0  million.  The
impact on future years is not considered significant.

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

NOTE 2--RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

         In September  2000,  the Financial  Accounting  Standards  Board (FASB)
issued Statement of Financial  Accounting  Standards (SFAS) No. 140, "Accounting
for  Transfers  and  Servicing  of  Financial  Assets  and   Extinguishments  of
Liabilities,"  which replaces SFAS No. 125. The Statement  revises the standards
for accounting for the  securitization  and other transfers of financial  assets
and collateral, and requires certain disclosures,  but carries over most of SFAS
No. 125's  provisions  without  reconsideration.  SFAS No. 140 is effective  for
transfers and servicing of financial assets and  extinguishments  of liabilities
occurring  after  March  31,  2001.  Management  believes  that  adopting  these
components  of SFAS No.  140 will not have a  material  impact on the  Company's
financial  position  or  results  of  operations.  SFAS No.  140 must be applied
prospectively.  For  recognition  and  reclassification  of  collateral  and for
disclosures  relating  to  securitization   transactions  and  collateral,  this
Statement was adopted as of December 31, 2000 and did not have a material impact
on the Company's financial position.

         In June 2001,  the FASB issued SFAS No. 141,  "Business  Combinations,"
and SFAS No. 142, "Goodwill and Other Intangible  Assets." SFAS No. 141 requires
that all business combinations be


                                       8

<PAGE>

NOTE 2--RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (CONTINUED)

accounted for by a single method--the purchase method. This Statement eliminates
the pooling-of-interests  method but carries forward without reconsideration the
guidance  in  Accounting  Principles  Board  (APB)  Opinion  No.  16,  "Business
Combinations" and SFAS No. 38, "Accounting for  Preacquisition  Contingencies of
Purchased  Enterprises"  related to the  application  of the purchase  method of
accounting.  The  provisions of SFAS No. 141 apply to all business  combinations
initiated after June 30, 2001, and all business combinations accounted for using
the purchase method for which the date of acquisition is July 1, 2001, or later.
SFAS No.  142  significantly  changes  the  accounting  for  goodwill  and other
intangible assets subsequent to their initial recognition. SFAS No. 142 requires
that goodwill and some intangible assets no longer be amortized,  but tested for
impairment  at least  annually by comparing  the fair value of those assets with
their  recorded  amounts.  SFAS No. 142 is effective for fiscal years  beginning
after December 15, 2001 and must be adopted at the beginning of the fiscal year.
However,  goodwill and  intangible  assets  acquired in a transaction  completed
after June 30, 2001, but before SFAS No. 142 is adopted,  would be accounted for
in  accordance  with the  amortization  and  nonamortization  provisions of this
Statement.  Upon  adoption  on January 1, 2002,  the  amortization  of  existing
goodwill  will  cease and a  transitional  impairment  test  will be  performed.
Impairment  loss  at  adoption,  if any,  will  be  recognized  as a  change  in
accounting  principle.  Management  believes that at adoption,  SFAS No. 141 and
SFAS No. 142 will not have a material impact on the Company's financial position
or results of operations.  Upon  adoption,  goodwill  amortization  for the year
ending December 31, 2002 will be reduced by  approximately  $12.5 million and no
previously acquired goodwill is expected to be impaired.

         In June 2001,  the FASB  issued  SFAS No.  143,  "Accounting  for Asset
Retirement  Obligations".  This Statement addresses the financial accounting and
reporting for obligations  associated with the retirement of tangible long-lived
assets  and the  associated  asset  retirement  costs.  It  applies to the legal
obligations associated with the retirement of long-lived assets that result from
the  acquisition,  construction,  development and, or, the normal operation of a
long-lived  asset. A legal  obligation is an obligation that a party is required
to settle as a result of an  existing or enacted  law,  statute,  ordinance,  or
written  or oral  contract  or by  legal  construction  under  the  doctrine  of
promissory  estoppel.  This  Statement is effective  for fiscal years  beginning
after June 15, 2002.  Management  believes that adopting this Statement will not
have a  material  impact on the  Company's  financial  position  or  results  of
operations.

         In August  2001,  the FASB  issued SFAS No.  144,  "Accounting  for the
Impairment or Disposal of Long-Lived Assets". This Statement supersedes SFAS No.
121,  "Accounting  for the  Impairment of Long-Lived  Assets and for  Long-Lived
Assets to Be Disposed of" and the  accounting  and  reporting  provisions of APB
Opinion No. 30,  "Reporting the Results of  Operations-Reporting  the Effects of
Disposal of a Segment of Business,  and Extraordinary,  Unusual and Infrequently
Occurring Events and Transactions". SFAS No. 144 establishes a single accounting
model for long-lived assets to be disposed of by sale,  whether  previously held
and  used  or  newly  acquired.   This  Statement  carries  over  the  framework
established in SFAS No. 121, and is effective for fiscal years  beginning  after
December 15, 2001.  Management  believes that adopting this  Statement  will not
have a  material  impact on the  Company's  financial  position  or  results  of
operations.

NOTE 3--EARNINGS PER SHARE

         Basic  earnings  per share (EPS) is computed by dividing  net income by
the weighted  average  number of common  shares  outstanding  during the period.
Diluted  EPS  incorporates  the  dilutive  effect  of common  stock  equivalents
outstanding  on an average  basis during the period.  Stock options are a common
stock

                                       9


<PAGE>

NOTE 3--EARNINGS PER SHARE (CONTINUED)

equivalent.  The following table presents a reconciliation  of basic and diluted
EPS for the three months and nine months ended September 30, 2000 and 2001:

<TABLE>
<CAPTION>

                                   THREE MONTHS ENDED SEPTEMBER 30,                     NINE MONTHS ENDED SEPTEMBER 30,
                             -------------------------------------------------   -------------------------------------------------
                                      2000                       2001                     2000                       2001
                             ----------------------     ----------------------   ----------------------      ---------------------
(AMOUNTS IN THOUSANDS,
 EXCEPT PER SHARE DATA)        BASIC       DILUTED        BASIC       DILUTED      BASIC       DILUTED         BASIC      DILUTED
---------------------------- --------      --------     --------      --------   --------      --------      --------     --------
<S>                          <C>           <C>          <C>           <C>        <C>           <C>           <C>          <C>
Net Income.................. $131,576      $131,576     $125,129      $125,129   $431,462      $431,462      $349,566     $349,566
                             ========      ========     ========      ========   ========      ========      ========     ========
Weighted average common
  shares outstanding........  160,760       160,760      157,585       157,585    162,259       162,259       158,215      158,215
Additional shares due to:
  Assumed conversion of
    dilutive stock options..       --           255           --         1,444         --           416            --          701
                             --------      --------     --------      --------   --------      --------      --------     --------
Adjusted weighted average
  common shares outstanding.  160,760       161,015      157,585       159,029    162,259       162,675       158,215      158,916
                             ========      ========     ========      ========   ========      ========      ========     ========
Net income per share........    $0.82         $0.82        $0.79         $0.79      $2.66         $2.65         $2.21        $2.20
                             ========      ========     ========      ========   ========      ========      ========     ========
</TABLE>


NOTE 4--COMPREHENSIVE INCOME

         The following table presents a summary of the components of accumulated
other comprehensive income (loss):

<TABLE>
<CAPTION>
                                                      NET UNREALIZED GAINS
                                                     (LOSSES) ON SECURITIES          FOREIGN CURRENCY         NET UNREALIZED GAINS
                                                       AVAILABLE FOR SALE         TRANSLATION ADJUSTMENT       ON CASH FLOW HEDGES
                                                     -----------------------      ----------------------        -----------------
                                                                      FOR THE NINE MONTHS ENDED SEPTEMBER 30,
                                                     ----------------------------------------------------------------------------
(DOLLARS IN THOUSANDS)                                  2000          2001          2000           2001          2000       2001
--------------------------------------------------   ---------      --------      --------      --------        ------    -------
<S>                                                  <C>            <C>           <C>           <C>             <C>       <C>
Beginning balance................................    $(32,548)      $ 41,879      $ (8,713)     $(11,191)       $   --    $    --
Cumulative effect of accounting change, net of tax          --            --            --            --            --     22,205
Change during the period.........................       32,642        81,275           358          (672)           --     56,572
                                                     ---------      --------      --------      --------        ------    -------
Ending balance...................................    $      94      $123,154      $ (8,355)     $(11,863)       $   --    $78,777
                                                     =========      ========      ========      ========        ======    =======
</TABLE>

<TABLE>
<CAPTION>
                                                                             MINIMUM PENSION               ACCUMULATED OTHER
                                                                           LIABILITY ADJUSTMENT       COMPREHENSIVE INCOME (LOSS)
                                                                           --------------------        -------------------------
                                                                              FOR THE NINE MONTHS ENDED SEPTEMBER 30,
                                                                           -----------------------------------------------------
(DOLLARS IN THOUSANDS)                                                      2000          2001           2000             2001
--------------------------------------------------------------------       ------        ------        --------         --------
<S>                                                                        <C>           <C>           <C>              <C>
Beginning balance...................................................       $ (689)       $ (803)       $(41,950)        $ 29,885
Cumulative effect of accounting change, net of tax..................           --            --              --           22,205
Change during the period............................................           --            --          33,000          137,175
                                                                           -------       -------       --------         --------
Ending balance......................................................       $ (689)       $ (803)       $ (8,950)        $189,265
                                                                           =======       =======       ========         ========
</TABLE>


NOTE 5--BUSINESS SEGMENTS

         The Company is organized  based on the  products  and services  that it
offers and operates in four principal areas:

         o    The Community Banking and Investment  Services Group offers a full
              range of banking  services,  primarily  to  individuals  and small
              businesses,  delivered through a tri-state network of branches and
              ATM's. These services include commercial loans, mortgages and home
              equity lines of credit,  consumer loans, deposit services and cash
              management as well as fiduciary,  private banking,  investment and
              asset management services for individuals and institutions.


                                       10

<PAGE>

NOTE 5--BUSINESS SEGMENTS (CONTINUED)

         o    The  Commercial   Financial   Services  Group  primarily  provides
              tailored  credit and cash  management  services to large corporate
              and middle market  companies.  Services include  commercial loans,
              asset based lending, commercial real estate lending, leasing and a
              comprehensive   product  array  of  deposit  and  cash  management
              services.

         o    The International Banking Group provides correspondent banking and
              trade-finance products and services to financial institutions, and
              extends  primarily  short-term  credit to corporations  engaged in
              international  business. The group's revenue predominately relates
              to foreign customers.

         o    The  Global   Markets  Group  manages  the  Company's   securities
              portfolio,  trading  operations,   wholesale  funding  needs,  and
              interest rate and liquidity risk.

         The  information,  set  forth in the  tables  on the  following  pages,
reflects  selected income  statement items and a selected  balance sheet item by
business unit. The  information  presented  does not  necessarily  represent the
business  units'  financial  condition and results of operations as if they were
independent  entities.  Unlike financial  accounting,  there is no authoritative
body of guidance for management accounting equivalent to US GAAP.  Consequently,
reported  results are not  necessarily  comparable with those presented by other
companies.

         The  information in this table is derived from the internal  management
reporting  system used by management to measure the  performance of the segments
and the Company overall.  The management  reporting system assigns balance sheet
and  income  statement  items  to each  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
segment  are  assigned  to  that  business,  other  than  restructuring  charges
(credits). Indirect costs, such as overhead, operations, and technology expense,
are  allocated  to the  segments  based on  studies of  billable  unit costs for
product or data processing.  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 goodwill  amorization,  certain  parent company
non-bank subsidiaries,  the elimination of the fully taxable-equivalent amounts,
the amount of the provision for credit losses  (over)/under  the RAROC  expected
loss for the period, the earnings associated with the unallocated equity capital
and allowance for credit losses,  and the residual costs of support  groups,  as
well as certain nonrecurring items such as restructuring  charges (credits).  In
addition,  it includes two units,  the Credit  Management  Group,  which manages
nonperforming  assets,  and  the  Pacific  Rim  Corporate  Group,  which  offers
financial products to Asian-owned subsidiaries located in the U.S.




                                       11

<PAGE>

NOTE 5--BUSINESS SEGMENTS (CONTINUED)

<TABLE>
<CAPTION>
                                                         COMMUNITY BANKING
                                                          AND INVESTMENT          COMMERCIAL FINANCIAL          INTERNATIONAL
                                                          SERVICES GROUP             SERVICES GROUP             BANKING GROUP
                                                      ----------------------     ----------------------      ---------------------
                                                                 AS OF AND FOR THE THREE MONTHS ENDED SEPTEMBER 30,
                                                      ----------------------------------------------------------------------------
                                                        2000          2001         2000          2001          2000         2001
-------------------------------------------------     --------      --------     --------      --------      --------     --------
<S>                                                   <C>           <C>          <C>           <C>           <C>          <C>
RESULTS OF OPERATIONS
(DOLLARS IN THOUSANDS):
Total revenue(1).................................     $294,762      $282,788     $233,429      $201,457      $ 22,571     $ 22,751
Net income (loss)................................     $ 62,734      $ 50,295     $ 80,776      $ 57,772      $  4,349     $  4,681
Total assets at period end (dollars in millions).     $  9,118      $ 10,106     $ 18,440      $ 16,968      $  1,367     $  1,406

<CAPTION>
                                                              GLOBAL                                               UNIONBANCAL
                                                          MARKETS GROUP                  OTHER                     CORPORATION
                                                      ----------------------     ----------------------      ---------------------
                                                                 AS OF AND FOR THE THREE MONTHS ENDED SEPTEMBER 30,
                                                      ----------------------------------------------------------------------------
                                                        2000          2001         2000          2001          2000         2001
-------------------------------------------------     --------      --------     --------      --------      --------     --------
<S>                                                   <C>           <C>          <C>           <C>           <C>          <C>
RESULTS OF OPERATIONS
(DOLLARS IN THOUSANDS):
Total revenue(1).................................     $  9,081      $ 25,548     $ 13,070      $ 18,952      $572,913     $551,496
Net income (loss)................................     $  3,202      $ 13,164     $(19,485)     $   (783)     $131,576     $125,129
Total assets at period end (dollars in millions).     $  3,960      $  5,767     $    860      $    992      $ 33,745     $ 35,239

-----------
<FN>
(1)      Total revenue is comprised of net interest income and noninterest income
</FN>
</TABLE>

<TABLE>
<CAPTION>
                                                   COMMUNITY BANKING
                                                    AND INVESTMENT           COMMERCIAL FINANCIAL              INTERNATIONAL
                                                    SERVICES GROUP             SERVICES GROUP                  BANKING GROUP
                                                 ---------------------      ----------------------      --------------------------
                                                              AS OF AND FOR THE NINE MONTHS ENDED SEPTEMBER 30,
                                                 ---------------------------------------------------------------------------------
                                                   2000         2001          2000          2001            2000            2001
-------------------------------------------      --------     --------      --------      --------      ----------      ----------
<S>                                              <C>          <C>           <C>           <C>           <C>             <C>
RESULTS OF OPERATIONS
(DOLLARS IN THOUSANDS):
Total revenue(1)...........................      $861,778     $830,975      $690,219      $630,795      $   70,599      $   70,555
Net income (loss)..........................      $179,090     $149,241      $242,734      $195,360      $   14,962      $   15,616
Total assets at period end (dollars in
   millions)...............................      $  9,118     $ 10,106      $ 18,440      $ 16,968      $    1,367      $    1,406


<CAPTION>
                                                         GLOBAL                                               UNIONBANCAL
                                                    MARKETS GROUP                   OTHER                     CORPORATION
                                                 ---------------------      ----------------------      --------------------------
                                                              AS OF AND FOR THE NINE MONTHS ENDED SEPTEMBER 30,
                                                 ---------------------------------------------------------------------------------
                                                   2000         2001          2000          2001            2000            2001
-------------------------------------------      --------     --------      --------      --------      ----------      ----------
<S>                                              <C>          <C>           <C>           <C>           <C>             <C>
RESULTS OF OPERATIONS
(DOLLARS IN THOUSANDS):
Total revenue(1)...........................       $10,040      $49,894       $47,171       $84,459      $1,679,807      $1,666,678
Net income (loss)..........................      $(1,060)      $19,269      $(4,264)     $(29,920)        $431,462        $349,566
Total assets at period end (dollars in
   millions)...............................        $3,960       $5,767          $860          $992         $33,745         $35,239

-----------
<FN>
(1)      Total revenue is comprised of net interest income and noninterest income
</FN>
</TABLE>

                                       12
<PAGE>

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

         On January 1, 2001, the Company  adopted SFAS No. 133,  "Accounting for
Derivative Instruments and Hedging Activities", which establishes accounting and
reporting  standards for derivative  instruments,  including certain  derivative
instruments embedded in other contracts. All derivatives,  whether designated as
a hedge, or not, are required to be recorded on the balance sheet at fair value.
SFAS No. 133 requires that  derivative  instruments  used to hedge be identified
specifically   to  assets,   liabilities,   firm   commitments   or  anticipated
transactions  and be expected to be effective  throughout the life of the hedge.
Derivative  instruments  that do not qualify as either a fair value or cash flow
hedge are valued at fair value and classified as trading account assets with the
resultant gain or loss recognized in current earnings.  The adoption of SFAS No.
133  resulted in the  recognition  of a loss of $6 million ($4  million,  net of
tax), which is included in noninterest  expense.  Additionally,  the adoption of
SFAS No. 133 resulted in a cumulative effect of a change in accounting principle
on  accumulated  other  comprehensive  income,  net of tax,  of $22  million  in
unrealized gain.

         Derivative   positions   are  integral   components  of  the  Company's
designated asset and liability management activities.  The Company uses interest
rate  derivative  instruments  as part of its  management of asset and liability
positions.  Derivatives  are used to  manage  interest  rate  risk  relating  to
specified groups of assets and  liabilities,  primarily  LIBOR-based  commercial
loans and trust preferred securities.

         CASH FLOW HEDGES

         HEDGING STRATEGIES FOR VARIABLE RATE LOANS

         The Company  engages in several  types of cash flow hedging  strategies
for which the hedged  transactions are forecasted future loan interest payments,
and the hedged risk is the  variability  in those payments due to changes in the
designated  benchmark rate,  e.g., U.S. dollar LIBOR. In these  strategies,  the
hedging instruments are matched with groups of variable rate loans such that the
tenor  of the  variable  rate  loans  and  that  of the  hedging  instrument  is
identical.  Cash flow hedging  strategies  include the  utilization of purchased
floor, cap and corridor options and interest rate swaps.

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

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

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

         The Company  uses  purchased  interest  rate caps to hedge the variable
cash flows  associated  with 3-month LIBOR or 6-month  LIBOR indexed  negotiable
certificates  of deposits  (CDs).  Net  payments  to be  received  under the cap
contract  offset the increase in interest  expense  caused by the relevant LIBOR
index rising above the cap's strike rate.

         Hedging  transactions  are structured at inception so that the notional
amounts of the hedge are matched with an equal principal amount of loans or CDs,
the index and repricing  frequencies  of the hedge


                                       13

<PAGE>

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

matches those of the loans or CDs, and the period in which the designated hedged
cash  flows  occur  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.  During
the third quarter of 2001, the Company recognized a net loss of $0.1 million due
to ineffectiveness, which is recognized in noninterest expense.

         FAIR VALUE HEDGES

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

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

         Fair value hedging transactions are structured at inception so that the
notional  amounts of the swap match an associated  principal amount of the Trust
Preferred  Securities.  The interest payment dates, the expiration date, and the
embedded call option of the swap match those of the Trust Preferred  Securities.
The  ineffectiveness  on the fair value hedges  during the third quarter of 2001
was $0.4 million.

         OTHER

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

NOTE 7--SUBSEQUENT EVENT

         On October 24, 2001,  the Board of Directors  declared a quarterly cash
dividend  of $0.25 per  share of  common  stock.  The  dividend  will be paid on
January 4, 2002 to shareholders of record as of December 7, 2001.

         As previously announced,  effective November 9, 2001, the Union Bank of
California  branch  offices in Guam and Saipan have been sold to First  Hawaiian
Bank.  This  transaction  will not result in a material  impact to the Company's
financial position or results of operations.




                                       14

<PAGE>


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

         THIS DOCUMENT INCLUDES FORWARD-LOOKING INFORMATION, WHICH IS SUBJECT TO
THE "SAFE  HARBOR"  CREATED BY SECTION  27A OF THE  SECURITIES  ACT OF 1933,  AS
AMENDED, AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. OUR
MANAGEMENT MAY MAKE FORWARD-LOOKING  STATEMENTS IN OTHER SECURITIES AND EXCHANGE
COMMISSION FILINGS,  PRESS RELEASES,  NEWS ARTICLES,  CONFERENCE CALLS WITH WALL
STREET  ANALYSTS  AND  SHAREHOLDERS  AND  WHEN  WE ARE  SPEAKING  ON  BEHALF  OF
UNIONBANCAL  CORPORATION.  FORWARD-LOOKING  STATEMENTS  CAN BE IDENTIFIED BY THE
FACT THAT THEY DO NOT RELATE  STRICTLY TO  HISTORICAL OR CURRENT  FACTS.  OFTEN,
THEY INCLUDE THE WORDS  "BELIEVE,"  "EXPECT,"  "ANTICIPATE,"  "INTEND,"  "PLAN,"
"ESTIMATE,"  "PROJECT," OR WORDS OF SIMILAR  MEANING,  OR FUTURE OR  CONDITIONAL
VERBS  SUCH  AS   "WILL,"   "WOULD,"   "SHOULD,"   "COULD,"   OR  "MAY."   THESE
FORWARD-LOOKING  STATEMENTS ARE INTENDED TO PROVIDE  INVESTORS  WITH  ADDITIONAL
INFORMATION  WITH  WHICH THEY MAY  ASSESS  OUR  FUTURE  POTENTIAL.  ALL OF THESE
FORWARD-LOOKING  STATEMENTS ARE BASED ON ASSUMPTIONS  ABOUT AN UNCERTAIN  FUTURE
AND ARE BASED ON INFORMATION AVAILABLE AT THE DATE SUCH STATEMENTS ARE ISSUED.

         THERE ARE NUMEROUS  RISKS AND  UNCERTAINTIES  THAT COULD AND WILL CAUSE
ACTUAL RESULTS TO DIFFER FROM THOSE DISCUSSED IN OUR FORWARD-LOOKING STATEMENTS.
MANY OF THESE  FACTORS  ARE BEYOND OUR  ABILITY TO CONTROL OR PREDICT  AND COULD
HAVE A MATERIAL ADVERSE EFFECT ON OUR STOCK PRICE, FINANCIAL CONDITION,  RESULTS
OF OPERATIONS OR PROSPECTS.  SUCH RISKS AND UNCERTAINTIES  INCLUDE,  BUT ARE NOT
LIMITED TO, THE FOLLOWING  FACTORS:  ADVERSE  ECONOMIC  CONDITIONS IN CALIFORNIA
(INCLUDING PROBLEMS ARISING FROM THE CALIFORNIA ENERGY CRISIS), GLOBAL POLITICAL
AND GENERAL ECONOMIC  CONDITIONS  RELATED TO THE TERRORIST  ATTACKS ON SEPTEMBER
11, 2001 AND THEIR AFTERMATH,  ADVERSE  ECONOMIC  CONDITIONS  AFFECTING  CERTAIN
INDUSTRIES,  FLUCTUATIONS IN INTEREST RATES,  THE CONTROLLING  INTEREST IN US BY
THE  BANK  OF  TOKYO-MITSUBISHI,  LTD.,  COMPETITION  IN THE  BANKING  INDUSTRY,
RESTRICTIONS ON DIVIDENDS,  ADVERSE EFFECTS OF CURRENT AND FUTURE BANKING RULES,
REGULATIONS AND LEGISLATION, AND RISKS ASSOCIATED WITH VARIOUS STRATEGIES WE MAY
PURSUE, INCLUDING POTENTIAL ACQUISITIONS,  DIVESTITURES AND RESTRUCTURINGS.  SEE
ALSO THE SECTION ENTITLED "CERTAIN BUSINESS RISK FACTORS" ON PAGE 44.

INTRODUCTION

         We  are  a  California-based,  commercial  bank  holding  company  with
consolidated  assets of $35.2  billion at September  30, 2001.  At September 30,
2001,  Union Bank of California,  N.A. was the third largest  commercial bank in
California, based on total assets and total deposits in California.

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

         In July 2000 and April 2001,  we announced  stock  repurchase  plans of
$100 million each. We repurchased  $69 million in common stock between July 2000
and March 2001,  $25 million  between April 2001 and June 2001,  and $31 million
between July 2001 and September  2001. As of September 30, 2001,  $75 million of
common stock  repurchases  authorized is available for repurchase.  At September
30,  2001,  The Bank of  Tokyo-Mitsubishi,  Ltd.  (BTM)  owned 67 percent of the
UnionBanCal Corporation.

         Our interim  financial  information  should be read in conjunction with
our Form 10-K for the year ended  December 31, 2000.  Certain  amounts for prior
periods  have been  reclassified  to  conform  to  current  financial  statement
presentation.

TERRORIST ATTACKS ON SEPTEMBER 11, 2001

         The  terrorist  attacks on the World Trade Center on September 11, 2001
have impacted everyone both in the United States and globally. The direct impact
on us was felt  with the  presence  of our Edge Act  subsidiary,  Union  Bank of
California International,  Inc., which was located in one of the two World Trade
Center  towers.  Fortunately,  all 106  employees  were  safely  evacuated.  The
operations of this  subsidiary


                                       15

<PAGE>

were immediately  transferred to our operations department located in California
until the New York group could once again handle their  operations.  No material
losses  related  to  customers  or  us  were  experienced  as a  result  of  the
international operations.

         During the week that followed the attacks, our retail broker/dealer and
our  trust  department  were  negatively  impacted  by the  close  of our  stock
exchanges.  However,  the  amount of revenue  loss  during  this  period was not
material.

         We do not have material  exposure to either the airline industry or the
insurance  industry.  We have  attributed a portion of our  allowance for credit
losses  for the  impact  the  terrorist  attacks  will  have on  certain  of our
customers. It is not known yet to what extent our customers will be impacted. As
information develops, further adjustments to our allowance may be necessary.

         It is management's belief that the negative impact on our third quarter
earnings of the September 11, 2001 attacks was immaterial.

SUMMARY

         To  facilitate  the  discussion  of  the  results  of  operations,  the
following  table  includes  certain pro forma earnings  disclosures  and ratios.
These presentations  supplement the Consolidated Statements of Income on page 4,
which are prepared in accordance with accounting  principles  generally accepted
in the United  States of America  (US GAAP),  by  excluding  the  effects of the
restructuring  credit  recorded  in the  first  and  second  quarters  of  2000.
Management  believes that it is meaningful to understand  the operating  results
and trends excluding this item and, therefore,  has included information in this
table and in the  management's  discussion  and  analysis  which  follows,  that
presents  income  excluding  this item and related pro forma ratio and per share
calculations.

<TABLE>
<CAPTION>

                                                                            FOR THE THREE MONTHS           FOR THE NINE MONTHS
                                                                             ENDED SEPTEMBER 30,           ENDED SEPTEMBER 30,
                                                                           ----------------------        ------------------------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)                                2000          2001            2000            2001
-----------------------------------------------------------------------    --------      --------        --------        --------
<S>                                                                        <C>           <C>             <C>             <C>
INCOME BEFORE INCOME TAXES.............................................    $202,176      $184,880        $662,005        $521,337
   Restructuring credit................................................          --            --         (19,000)             --
   Taxable equivalent adjustment.......................................        (641)         (426)         (1,933)         (1,638)
   Income tax expense(1)...............................................     (69,959)      (59,325)       (221,451)       (170,133)
                                                                           --------      --------        --------        --------
PRO FORMA EARNINGS.....................................................    $131,576      $125,129        $419,621        $349,566
                                                                           ========      ========        ========        ========


PER COMMON SHARE, EXCLUDING RESTRUCTURING CREDIT
   Pro forma earnings (basic)..........................................    $   0.82      $   0.79        $   2.59        $   2.21
   Pro forma earnings (diluted)........................................        0.82          0.79            2.58            2.20
SELECTED FINANCIAL RATIOS, EXCLUDING RESTRUCTURING CREDIT
   Pro forma return on average assets(2)...............................        1.55%         1.43%           1.67%           1.35%
   Pro forma return on average common equity(2)........................       16.43         14.19           18.11           13.69
   Pro forma efficiency ratio(3).......................................       50.80         57.45           50.47           55.86
   Pro forma dividend payout ratio.....................................       30.49         31.65           28.96           33.94
-----------
<FN>
(1)      Excludes the income tax expense effect of $7.159 million in the nine
         months ending September 30, 2000 related to restructuring credits.

(2)      Annualized

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


                                       16

<PAGE>


         COMPARISON  OF THREE MONTHS ENDED  SEPTEMBER 30, 2000 AND SEPTEMBER 30,
2001

         Reported  net income was $125.1  million,  or $0.79 per diluted  common
share, in the third quarter of 2001,  compared with $131.6 million, or $0.82 per
diluted  common  share,  in the third  quarter of 2000.  There were no  proforma
earnings  adjustments  for the third quarters of 2000 and 2001. This decrease in
reported diluted earnings per share of 4 percent below the third quarter of 2000
was due to a $26.1 million, or 6 percent,  decrease in net interest income (on a
taxable-equivalent  basis)  and a  $25.7  million,  or 9  percent,  increase  in
noninterest  expense,  partially  offset  by a  $30.0  million,  or 38  percent,
decrease in provision for credit losses, a $4.5 million, or 3 percent,  increase
in noninterest  income,  and a three  percentage point decrease in the effective
income tax rate. Other highlights of the third quarter of 2001 include:

         o    Net interest  income,  on a  taxable-equivalent  basis, was $378.5
              million in the third quarter of 2001, a decrease of $26.1 million,
              or 6 percent,  from the third quarter of 2000. Net interest margin
              in the third  quarter of 2001 was 4.81  percent,  a decrease of 49
              basis  points  from  the  third  quarter  of 2000  reflecting  the
              compression caused by lower interest rates.

         o    Noninterest  income  was $173.4  million  in the third  quarter of
              2001,  an increase of $4.5 million,  or 3 percent,  from the third
              quarter of 2000.  Service  charges on deposit  accounts  grew $9.0
              million,  or 17  percent,  trust and  investment  management  fees
              declined  by $2.0  million,  or 5  percent,  merchant  transaction
              processing  fees  increased $2.0 million,  or 10 percent,  and all
              other noninterest income, including auto lease residual writedowns
              of $5.0  million  in the third  quarter  of 2000,  decreased  $4.4
              million,  or  8  percent.   There  were  no  auto  lease  residual
              writedowns in the third quarter of 2001.

         o    A provision for credit losses of $50.0 million was recorded in the
              third  quarter of 2001,  compared  with $80.0 million in the third
              quarter  of  2000.   This  resulted  from   management's   regular
              assessment of overall credit quality, loan portfolio  composition,
              business and economic  conditions  in relation to the level of the
              allowance for credit  losses.  The allowance for credit losses was
              $629.7  million,  or 142  percent of total  nonaccrual  loans,  at
              September 30, 2001,  compared with $525.9 million,  or 186 percent
              of total nonaccrual loans, at September 30, 2000.

         o    Noninterest  expense  was $317.0  million in the third  quarter of
              2001, an increase of $25.7 million,  or 9 percent,  over the third
              quarter of 2000.  Most of this  increase is  attributed  to higher
              salaries and employee  benefits of $18.9  million,  or 12 percent,
              higher  software  expenses of $2.4  million,  or 41  percent,  and
              higher  advertising and public relations  expense of $2.0 million,
              or 25 percent.  The  increase in salaries  and  employee  benefits
              expense was  primarily  caused by a 6 percent  increase in average
              staff levels,  annual merit  increases,  and higher other benefits
              expense.

         o    Income tax expense in the third quarter of 2001 was $59.3 million,
              a 32 percent  effective  income tax rate. For the third quarter of
              2000, the effective  income tax rate was 35 percent.  The decrease
              in the  year-over-year  effective  income  tax rate was  primarily
              attributed to an increase in low income housing tax credits in the
              third quarter of 2001.

         o    Reported return on average assets decreased to 1.43 percent in the
              third  quarter of 2001 from 1.55 percent a year  earlier,  and our
              return on average  common  equity  decreased to 14.19 percent from
              16.43 percent a year earlier.

         o    Total loans at September 30, 2001 were $25.6  billion,  a decrease
              of $563.7 million, or 2 percent, from September 30, 2000.

         o    Nonperforming assets increased $150.5 million, or 50 percent, from
              September  30,  2000 to $450.2  million  at  September  30,  2001.
              Nonperforming  assets as a percentage of total assets increased to
              1.28 percent at September  30, 2001,  compared with 0.89 percent a
              year  earlier.  Total  nonaccrual  loans  were  $444.5  million at
              September 30, 2001,  compared with $283.0 million at


                                       17

<PAGE>

              September  30,  2000,  resulting  in an  increase  in the ratio of
              nonaccrual loans to total loans from 1.08 percent at September 30,
              2000 to 1.74 percent at September 30, 2001.

         o    Our Tier 1 and total risk-based  capital ratios were 11.18 percent
              and 13.05 percent,  respectively,  at September 30, 2001, compared
              with 10.52 percent and 12.35 percent,  respectively,  at September
              30, 2000.  Our leverage  ratio was 10.50  percent at September 30,
              2001 compared with 10.47 percent at September 30, 2000.

         COMPARISON  OF NINE MONTHS ENDED  SEPTEMBER  30, 2000 AND SEPTEMBER 30,
2001

         Reported  net income was $349.6  million,  or $2.20 per diluted  common
share, in the first nine months of 2001,  compared with $431.5 million, or $2.65
per diluted  common share,  in the first nine months of 2000.  There were no pro
forma net  earnings  adjustments  for the first nine  months of 2001.  Pro forma
income was $419.6 million,  or $2.58 per diluted common share, in the first nine
months of 2000, which excluded the effects of the $19.0 million of restructuring
credits ($11.8 million net of tax) recorded in the first and second  quarters of
2000. This decrease in pro forma diluted  earnings per share of 15 percent below
the  first  nine  months  of 2000  was due to a $83.2  million,  or 10  percent,
increase in noninterest expense, a $42.0 million, or 4 percent,  decrease in net
interest  income (on a  taxable-equivalent  basis),  and a $25.0 million,  or 13
percent,  increase in the provision  for credit  losses,  partially  offset by a
$28.6  million,  or 6  percent,  increase  in  noninterest  income,  and  a  two
percentage  point decrease in the effective income tax rate. Other highlights of
the first nine months of 2001 include:

         o    Net interest income, on a  taxable-equivalent  basis, was $1,145.7
              million in the first  nine  months of 2001,  a  decrease  of $42.0
              million,  or 4 percent,  from the first nine  months of 2000.  Net
              interest margin in the first nine months of 2001 was 4.90 percent,
              a decrease  of 33 basis  points from the first nine months of 2000
              reflecting the compression caused by lower interest rates.

         o    Noninterest  income was $522.6 million in the first nine months of
              2001, an increase of $28.6 million,  or 6 percent,  over the first
              nine  months of 2000.  Service  charges on deposit  accounts  grew
              $27.6 million, or 18 percent, merchant transaction processing fees
              increased  $5.9  million,  or 11 percent,  merchant  banking  fees
              decreased $14.0 million, or 34 percent,  and all other noninterest
              income increased $9.1 million, or 4 percent. All other noninterest
              income  included a $20.7 million  one-time gain  recognized on the
              exchange  of  our  STAR  System  stock  and  auto  lease  residual
              writedowns  of $28.3  million in the current  year,  compared with
              auto lease residual writedowns in the first nine months of 2000 of
              $17.5 million.

         o    A provision  for credit  losses of $215.0  million was recorded in
              the first nine months of 2001, compared with $190.0 million in the
              first nine months of 2000. This resulted from management's regular
              assessment of overall credit quality,  loan portfolio  composition
              and business and economic  conditions  in relation to the level of
              the allowance for credit losses.

         o    Noninterest expense was $932.0 million in the first nine months of
              2001, an increase of $83.2 million, or 10 percent,  over the first
              nine months of 2000,  excluding the  restructuring  credits in the
              first and second quarters of 2000.  Salaries and employee benefits
              increased $55.8 million,  or 13 percent,  primarily  caused by a 4
              percent  increase in average staff levels,  annual merit increases
              and  to  a  $16.0  million   one-time  credit  for  an  accounting
              methodology  change  in  recognizing   pension  expense  in  2000.
              Advertising and public relations  expense  increased $7.6 million,
              or 37 percent,  mainly due to marketing  efforts  aimed at growing
              deposits,  small business relationships,  and the residential loan
              business.  Software expense increased $5.8 million, or 34 percent,
              mainly related to the implementation of ebusiness initiatives. All
              other noninterest  expense  increased $14.1 million,  or 4 percent
              over the same period of 2000,  including the recognition of a loss
              of $6.2 million at adoption of  Statement of Financial  Accounting
              Standards (SFAS) No. 133 in the current year.


                                       18

<PAGE>


         o    Income tax  expense  in the first  nine  months of 2001 was $170.1
              million,  a 33 percent  effective  income tax rate.  For the first
              nine months of 2000, the effective income tax rate was 35 percent.
              The decrease in the  year-over-year  effective income tax rate was
              primarily  attributable  to an increase in low income  housing tax
              credits in the first nine months of 2001.

         o    Reported return on average assets decreased to 1.35 percent from a
              pro forma 1.67  percent a year  earlier,  and  reported  return on
              average common equity  decreased to 13.69 percent from a pro forma
              18.11 percent a year earlier.

BUSINESS SEGMENTS

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

         The Risk Adjusted Return on Capital (RAROC)  methodology  used seeks to
attribute  economic  capital to business units consistent with the level of risk
they assume.  These risks are primarily credit risk, market risk and operational
risk.  Credit risk is the potential loss in economic value due to the likelihood
that the obligor will not perform as agreed.  Market risk is the potential  loss
in fair value due to changes in interest rates, currency rates and volatilities.
Operational  risk is the  potential  loss due to failures  in internal  control,
system failures, or external events.

         The following tables reflect the condensed income statements,  selected
average  balance  sheet  items and  selected  financial  ratios  for each of our
primary business units. The information presented does not necessarily represent
the business  units'  financial  condition  and results of operations as if they
were   independent   entities.   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 loss 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.  The management  reporting system
identifies  balance sheet and income statement items to each business unit based
on internal management  accounting  policies.  Net interest income is determined
using our internal funds transfer pricing system,  which assigns a cost of funds
to assets or a credit for funds to liabilities and capital, based on their type,
maturity or repricing  characteristics.  Noninterest income and expense directly
or indirectly attributable to a business unit are assigned to that business.





                                       19

<PAGE>

<TABLE>
<CAPTION>
                                                        COMMUNITY BANKING
                                                         AND INVESTMENT          COMMERCIAL FINANCIAL            INTERNATIONAL
                                                         SERVICES GROUP             SERVICES GROUP               BANKING GROUP
                                                     ----------------------     ----------------------       --------------------
                                                                   AS OF AND FOR THE THREE MONTHS ENDED SEPTEMBER 30,
                                                     ----------------------------------------------------------------------------
(DOLLARS IN THOUSANDS)                                 2000          2001         2000          2001          2000         2001
-------------------------------------------------    --------      --------     --------      --------       -------     --------
<S>                                                  <C>           <C>          <C>           <C>           <C>          <C>
RESULTS OF OPERATIONS:
   Net interest income...........................    $184,289      $172,501     $192,235      $166,350      $  9,102     $  8,732
   Noninterest income............................     110,473       110,287       41,194        35,107        13,469       14,019
                                                     --------      --------     --------      --------      --------     --------
   Total revenue.................................     294,762       282,788      233,429       201,457        22,571       22,751
   Noninterest expense...........................     181,101       191,871       75,104        81,974        14,040       14,006
   Credit expense................................      12,068         9,468       31,829        32,924         1,488        1,164
                                                     --------      --------     --------      --------      --------     --------
   Income before income tax expense (benefit)....     101,593        81,449      126,496        86,559         7,043        7,581
   Income tax expense (benefit)..................      38,859        31,154       45,720        28,787         2,694        2,900
                                                     --------      --------     --------      --------      --------     --------
   Net income (loss).............................    $ 62,734      $ 50,295     $ 80,776      $ 57,772      $  4,349     $  4,681
                                                     ========      ========     ========      ========      ========     ========

AVERAGE BALANCES (DOLLARS IN MILLIONS):
   Total loans(1)................................    $  8,057      $  9,114     $ 17,051      $ 15,416      $    928     $  1,004
   Total assets..................................       8,952        10,046       18,907        17,267         1,424        1,317
   Total deposits(1).............................      13,957        14,240        6,485         7,095         1,068        1,448
FINANCIAL RATIOS:
   Return on risk adjusted capital(2)............          42%           34%          19%           13%           20%          23%
   Return on average assets(2)...................        2.79          1.99         1.70          1.33          1.21         1.41
   Efficiency ratio(3)...........................       61.44         67.85        32.17         40.69         62.20        61.56

<CAPTION>
                                                             GLOBAL                                              UNIONBANCAL
                                                          MARKETS GROUP                  OTHER                   CORPORATION
                                                     ----------------------     ----------------------       --------------------
                                                                   AS OF AND FOR THE THREE MONTHS ENDED SEPTEMBER 30,
                                                     ----------------------------------------------------------------------------
(DOLLARS IN THOUSANDS)                                 2000          2001         2000          2001          2000         2001
-------------------------------------------------    --------      --------     --------      --------       -------      -------
<S>                                                  <C>           <C>          <C>           <C>           <C>          <C>
RESULTS OF OPERATIONS:
   Net interest income...........................    $  6,216      $ 13,646     $ 12,143      $ 16,862      $403,985     $378,091
   Noninterest income............................       2,865        11,902          927         2,090       168,928      173,405
                                                     --------      --------     --------      --------      --------     --------
   Total revenue.................................       9,081        25,548       13,070        18,952       572,913      551,496
   Noninterest expense...........................       3,895         4,079       17,238        25,112       291,378      317,042
   Credit expense................................          --           150       34,615         6,294        80,000       50,000
                                                     --------      --------     --------      --------      --------     --------
   Income before income tax expense (benefit)....       5,186        21,319      (38,783)      (12,454)      201,535      184,454
   Income tax expense (benefit)..................       1,984         8,155      (19,298)      (11,671)       69,959       59,325
                                                     --------      --------     --------      --------      --------     --------
   Net income (loss).............................    $  3,202      $ 13,164     $(19,485)     $   (783)     $131,576     $125,129
                                                     ========      ========     ========      ========      ========     ========

AVERAGE BALANCES (DOLLARS IN MILLIONS):
   Total loans(1)................................    $     --      $     80     $    419      $    303      $ 26,455     $ 25,917
   Total assets..................................       3,593         5,295          814           692        33,690       34,617
   Total deposits(1).............................       3,099         2,900          793           708        25,402       26,391
FINANCIAL RATIOS:
   Return on risk adjusted capital(2)............           8%           13%          na            na            na           na
   Return on average assets(2)...................        0.35          0.99           na            na          1.55%        1.43%
   Efficiency ratio(3)...........................       42.89         15.97           na            na         50.80        57.45

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

(2)      Annualized

(3)      The efficiency ratio is noninterest expense, excluding foreclosed asset
         expense (income), as a percentage of net interest income
         (taxable-equivalent) and noninterest income.

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

                                       20

<PAGE>
<TABLE>
<CAPTION>
                                                     COMMUNITY BANKING AND       COMMERCIAL FINANCIAL           INTERNATIONAL
                                                   INVESTMENT SERVICES GROUP        SERVICES GROUP             BANKING GROUP
                                                     ----------------------     ----------------------      ---------------------
                                                                   AS OF AND FOR THE THREE MONTHS ENDED SEPTEMBER 30,
                                                     ----------------------------------------------------------------------------
(DOLLARS IN THOUSANDS)                                 2000          2001         2000          2001          2000         2001
-------------------------------------------------    --------      --------     --------      --------      --------     --------
<S>                                                  <C>           <C>          <C>           <C>           <C>          <C>
RESULTS OF OPERATIONS:
   Net interest income...........................    $543,308      $519,801     $556,508      $518,390      $ 25,775     $ 27,357
   Noninterest income............................     318,470       311,174      133,711       112,405        44,824       43,198
                                                     --------      --------     --------      --------      --------     --------
   Total revenue.................................     861,778       830,975      690,219       630,795        70,599       70,555
   Noninterest expense(1)........................     535,256       556,510      220,460       234,659        40,421       41,737
   Credit expense................................      36,497        32,780       89,763        99,370         5,949        3,530
                                                     --------      --------     --------      --------      --------     --------
   Income before income tax
     expense (benefit)...........................     290,025       241,685      379,996       296,766        24,229       25,288
   Income tax expense (benefit)..................     110,935        92,444      137,262       101,406         9,267        9,672
                                                     --------      --------     --------      --------      --------     --------
   Net income (loss).............................    $179,090      $149,241     $242,734      $195,360      $ 14,962     $ 15,616
                                                     ========      ========     ========      ========      ========     ========

AVERAGE BALANCES (DOLLARS IN MILLIONS):
   Total loans(2)................................    $  8,013      $  8,776     $ 16,853      $ 15,968      $    953     $    980
   Total assets..................................       8,935         9,731       18,643        17,802         1,508        1,346
   Total deposits(2).............................      14,163        14,134        6,238         6,979           944        1,403
FINANCIAL RATIOS:
   Return on risk adjusted capital(3)............          42%           35%          21%           14%           20%          24%
   Return on average assets(3)...................        2.68          2.05         1.74          1.47          1.33         1.55
   Efficiency ratio(4)...........................       62.11         66.97        31.94         37.20         57.25        59.16

<CAPTION>
                                                                                                                UNIONBANCAL
                                                      GLOBAL MARKETS GROUP               OTHER                  CORPORATION
                                                     ----------------------     ----------------------    -----------------------
                                                                   AS OF AND FOR THE THREE MONTHS ENDED SEPTEMBER 30,
                                                     ----------------------------------------------------------------------------
(DOLLARS IN THOUSANDS)                                 2000          2001         2000          2001          2000         2001
-------------------------------------------------    --------      --------     --------      --------    ----------   ----------
<S>                                                  <C>           <C>          <C>           <C>         <C>          <C>
RESULTS OF OPERATIONS:
   Net interest income.....................          $ 19,829      $ 31,696     $ 40,379      $ 46,831    $1,185,799   $1,144,075
   Noninterest income......................            (9,789)       18,198        6,792        37,628       494,008      522,603
                                                     --------      --------     --------      --------    ----------   ----------
   Total revenue...........................            10,040        49,894       47,171        84,459     1,679,807    1,666,678
   Noninterest expense(1)..................            11,756        18,540       21,842        80,533       829,735      931,979
   Credit expense..........................                --           150       57,791        79,170       190,000      215,000
                                                     --------      --------     --------      --------    ----------   ----------
   Income before income tax
     expense (benefit).....................            (1,716)       31,204      (32,462)      (75,244)      660,072      519,699
   Income tax expense (benefit)............              (656)       11,935      (28,198)      (45,324)      228,610      170,133
                                                     --------      --------     --------      --------    ----------   ----------
   Net income (loss).......................          $ (1,060)     $ 19,269     $ (4,264)     $(29,920)   $  431,462   $  349,566
                                                     ========      ========     ========      ========    ==========   ==========

AVERAGE BALANCES (DOLLARS IN MILLIONS):
   Total loans(2)..........................          $     --      $     64     $    485      $    360    $   26,304   $   26,148
   Total assets............................             3,604         4,932          830           734        33,520       34,545
   Total deposits(2).......................             3,306         3,023          669           730        25,320       26,269
FINANCIAL RATIOS:
   Return on risk adjusted capital(3)......                (1)%           9%          na            na            na           na
   Return on average assets(3).............             (0.04)         0.52           na            na          1.72%        1.35%
   Efficiency ratio(4).....................            117.09         37.16           na            na         49.34        55.86


-----------
<FN>
(1)      "Other" includes first and second quarter 2000 restructuring credits of $19.0 million ($11.8 million, net of tax).

(2)      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.

(3)      Annualized.

(4)      The efficiency ratio is noninterest expense, excluding foreclosed asset
         expense (income), as a percentage of net interest income
         (taxable-equivalent) and noninterest income.
         na=not applicable
</FN>
</TABLE>

                                       21

<PAGE>


         COMMUNITY BANKING AND INVESTMENT SERVICES GROUP

         The Community Banking and Investment  Services Group strives to provide
the best  possible  financial  products  to  individuals  and  small  businesses
including a broad set of credit,  deposit and trust products  delivered  through
branches,  relationship managers, private bankers and trust administrators.  The
Community Banking and Investment Services Group provides its customers with high
quality  customer  service executed through a number of responsive and efficient
delivery channels.

         In the third quarter of 2001, net income decreased $12.4 million, or 20
percent,  compared to the prior year  quarter.  Total  revenue  decreased  $12.0
million, or 4 percent,  compared to a year earlier.  Despite increased asset and
deposit volumes, net interest income decreased $11.8 million over the prior year
primarily due to the declining interest rate environment. Noninterest income was
relatively  flat from the prior  year  quarter.  However,  excluding  auto lease
residual  writedowns  in the prior  year  quarter of $5.0  million,  noninterest
income  decreased 5 percent  compared  to a year  earlier.  Noninterest  expense
increased  $10.8  million,  or 6 percent,  compared to a year  earlier  with the
majority of that increase  being  attributable  to higher  salaries and employee
benefits and an increase in advertising expense.

         In 2001, the Community  Banking and Investment  Services Group has been
emphasizing growth in the consumer asset portfolio,  expanding wealth management
services,  extending  the small  business  franchise  and  expanding  the branch
network. The strategy for growing the consumer asset portfolio primarily focuses
on mortgage and home equity products,  originated through the branch network, as
well  as  through  wholesale,   correspondent,  and  wholesale  loan  purchases.
Residential  loans have grown by $1.6  billion,  or 52  percent,  since the same
period last year.  The Wealth  Management  division  is focused on becoming  the
preferred provider of banking and investment  products for affluent  individuals
in  geographic  areas  already  served by us.  This will be  achieved  through a
combination of superior  service,  a broad product suite, an increased number of
banking   locations   convenient   to  the  targeted   clientele   and  improved
cross-selling  programs.  Our completed  acquisition  of Copper  Mountain  Trust
Company is expected to enhance  our  growing  custody and 401(k)  administration
businesses.  Core  elements  of the  initiative  to extend  our  small  business
franchise include enhancing the sales force,  increasing  marketing  activities,
introducing new insurance and trade finance products,  adding new locations, and
developing online capabilities to complement physical distribution. Expansion of
the  distribution  network  will be achieved  through  acquisitions  and de novo
branching.  Expansion opportunities exist in both Southern California,  where we
have a particularly strong presence, and Northern California.

         In addition to our traditional network channels,  the Community Banking
and  Investment  Services  Group  has  an  established  alliance  with  Navicert
Financial  Corporation,  doing business as NIX Check Cashing and Operation Hope.
This alliance has allowed our small  business and consumer  clients  access to a
unique blend of financial  services  combining the NIX Check  Cashing  services,
Union Bank of  California  Banking  Services and Operation  Hope small  business
education  services.  Checking and savings account  services are available today
through  selected NIX Check Cashing  locations with future  services  planned to
include  applications for consumer loans,  credit cards, new and used car loans,
home equity loans and  residential  mortgages.  The NIX Check  Cashing  alliance
complements  our  current  network  of  15  Cash  and  Save(R)  outlets  located
throughout Southern and Central California.

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

         COMMUNITY  BANKING  serves over one  million  consumer  households  and
businesses through its 244 full-service  branches in California,  6 full-service
branches  in Oregon and  Washington,  and its network of 458  proprietary  ATMs.
Customers  may also access our  services 24 hours a day by  telephone or through
our  Bank@Home  product  at  www.UBOC.com.  In  addition,  the  division  offers
automated teller and point-of-sale  debit services through our membership in the
STAR System, the largest shared ATM network in the Western United States.


                                       22


<PAGE>


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

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

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

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

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

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

         o   The Private Bank focuses  primarily on  delivering  integrated  and
             customized  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 customized
             deposit  and credit  products.  The Private  Bank's  strategy is to
             expand  its   business   by   leveraging   existing   Bank   client
             relationships,  increasing its geographic  market  coverage and the
             breadth  of  its  products  and   services.   Through  12  existing
             locations,  the Private Bank relationship managers offer all of our
             available products and services.

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

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

         o   HighMark Capital Management, Inc., a registered investment advisor,
             provides  investment  advisory services to affiliated  domestic and
             offshore  mutual  funds,  including  the  HighMark  Funds.  It also
             provides  advisory  services  to  Union  Bank of  California  trust
             clients,  including  corporations,  pension funds and  individuals.
             HighMark  Capital  Management  also  provides  mutual fund  support
             services.  HighMark  Capital  Management'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   Business Trust provides retirement services, which includes trustee
             services,  investment  management,  and 401(k)  administration  and
             record   keeping,   to   businesses,   professional   corporations,
             government agencies, unions and non-profit organizations.  Business
             Trust's  strategy is to  leverage  the Bank's  existing  commercial
             relationships and third-party  distribution  network which includes
             attorneys,   certified   public   accountants   and   third   party
             administration firms.

         o   Securities  Services  is engaged  in  domestic  and  multi-currency
             custody, safekeeping,  mutual fund accounting,  securities lending,
             and corporate  trust services.  Its client base includes  financial
             institutions,  businesses,  government agencies,  unions, insurance
             companies,   mutual  funds,   investment  managers  and  non-profit
             organizations.  Securities  Services is the only West Coast  based,
             in-house provider of a full range of institutional trust services.

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

         o   The group,  which primarily  focuses on local,  state,  and federal
             agencies,  includes  an  expanding  product  offering to the Native
             American government market.  Niche markets have been developed that
             service  colleges,  universities,   trade  associations,   cultural
             institutions,  and religious non-profit organizations.  The group's
             strategy is to expand its market presence by continuing delivery of


                                       23


<PAGE>


             innovative  cash  management  products,  broadening  internet based
             technology  solutions,  and expanding  lending capabilities to tax-
             exempt clients.

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

         The group  competes  with larger  banks by  providing  service  quality
superior to that of its major competitors.  We have been recognized as among the
highest rated banks in California for customer service quality and satisfaction.

         The group's primary means of competing with community banks include its
large and  convenient  branch  network and its  reputation for innovative use of
technology to deliver banking services. We have the fifth largest branch network
among depository  institutions in California.  We also offer convenient  banking
hours to consumers  through our  drive-through  banking  locations  and selected
branches that are open seven days a week.

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

         COMMERCIAL FINANCIAL SERVICES GROUP

         The Commercial Financial Services Group offers customized financing and
cash  management  services  to  middle  market  and large  corporate  businesses
primarily  headquartered in the western United States. The Commercial  Financial
Services Group focuses on customer  segmentation,  allowing the group to provide
specialized  financing  expertise  to specific  geographic  markets and industry
segments  such as Energy,  Entertainment,  Real Estate and Retail.  Relationship
managers  and credit  executives  in the  Commercial  Financial  Services  Group
provide credit services  including  commercial  loans,  accounts  receivable and
inventory  financing,  project financing,  lease financing,  trade financing and
real estate  financing.  In addition to credit  services,  the group  offers its
customers  access to high quality cash  management  services  delivered  through
specialized  deposit  managers  with  extensive  experience  in cash  management
solutions for businesses.

         In the third quarter of 2001, net income decreased $23.0 million, or 28
percent, compared to the prior year quarter. Net interest income decreased $25.9
million  primarily due to lower asset volume and the declining rate environment.
Noninterest  income  decreased $6.1 million partly due to the gains from venture
capital  investments in the prior year coupled with losses  sustained in 2001 in
the Private Capital Portfolio. Excluding gains and losses from both periods, the
Commercial  Financial  Services  Group showed a 10 percent growth in noninterest
income.  Noninterest expense increased $6.9 million, or 9 percent, compared to a
year  earlier due to higher  expenses  to support  increased  product  sales and
deposit volume. Credit expense increased $1.1 million as a result of higher risk
assets in the portfolio.

         The group's initiatives during 2001 include expanding wholesale deposit
activities,   increasing   domestic  trade  financing  and  expanding  the  item
processing business.  Loan growth strategies include  originating,  underwriting
and syndicating loans in core competency markets,  such as the California middle
market,  commercial real estate,  energy,  entertainment,  equipment leasing and
commercial  finance.  The Commercial  Financial Services Group operates a strong
processing business, including services such as check processing, front-end item
processing,   cash  vault  services  and  digital  imaging.   Opportunities  for
outsourcing these  capabilities for  correspondent  banks, and credit unions are
significant.  In the processing  business,  Commercial  Financial Services Group
intends  to  build  new  capabilities,   in  addition  to  leveraging


                                       24



<PAGE>


existing  capabilities.  Some new initiatives  underway  include cash management
products with internet  delivery,  check  truncation at  point-of-sale,  digital
certificates  and e-bill payment and  presentment.  The  combination of expanded
products  and an emphasis on core  competencies  are expected to  contribute  to
strong earnings growth.

         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  traditional
             commercial lending, trade financing, and asset based loans;

         o   the Corporate Deposit Services Division, which provides deposit and
             cash  management  expertise to clients in the middle market,  large
             corporate market and specialized industries;

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

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

         o   the National Banking Division,  which provides credit services to a
             variety of  specialized  industries  including  retailers,  finance
             companies  and  insurance  companies,  as well as  large  corporate
             clients headquartered outside the United States;

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

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

         o   the  Communications,   Media  and  Entertainment  Division,   which
             provides  custom  financing  to middle  market and large  corporate
             clients in their defined industries.

         The group  competes  with  other  banks  primarily  on the basis of its
reputation as a "business bank," the quality of its relationship  managers,  and
the delivery of superior  customer  service.  We are recognized in California as
having a superior "business banking"  reputation  relative to other large banks.
We are also highly rated among  financial  institutions  for our cash management
services and systems.

         The group's main  strategy is to target  industries  and  companies for
which the group can reasonably  expect to be one of a customer's  primary banks.
Consistent  with its strategy,  the group  attempts to serve a large part of its
targeted customers' credit and depository needs.

         The  group  competes  with  a  variety  of  other  financial   services
companies.  Competitors  include  other  major  California  banks,  as  well  as
regional,  national  and  international  banks.  In  addition,  we compete  with
investment banks, commercial finance companies, leasing companies, and insurance
companies.

         INTERNATIONAL BANKING GROUP

         The  International  Banking  Group  focuses on providing  correspondent
banking  and trade  finance  related  products  and  services  to  international
financial  institutions  worldwide,  primarily  in  Asia.  This  focus  includes
products  and  services  such as  letters  of  credit,  international  payments,
collections  and  financing of mostly  short-term  transactions.  The group also
serves certain foreign firms and U.S.  corporate  clients in selected  countries
where we have branches, including Taipei, Taiwan, Seoul, Korea and Tokyo, Japan.
In the U.S., the group serves  subsidiaries and affiliates of non-Japanese Asian
companies and U.S.  branches/agencies  of foreign banks. The majority of revenue
generated by the International Banking Group is from customers domiciled outside
of the U.S.

         In the third quarter of 2001, net income  increased $0.3 million,  or 8
percent,  compared to the prior year quarter.  Total revenue was slightly higher
compared to third quarter 2000. However, lower portfolio


                                       25


<PAGE>


exposure and a $0.3 million  reduction in credit  expense  compared to the prior
year  contributed to the group's overall  increase in net income.  The nature of
the  International  Banking Group business  revolves  around  short-term,  trade
financing and  service-related  income,  which tends to result in  significantly
lower credit risk when compared to other long-term lending activities.

         The group has a long and  stable  history  of  providing  correspondent
banking and  trade-related  products  and  services to  international  financial
institutions.  The  group  continues  to be a market  leader,  achieving  strong
customer loyalty in the Asia Pacific  correspondent  banking market by providing
high quality  products and services at  competitive  prices.  The  International
Banking  Group head office is located in San  Francisco  with branches in Tokyo,
Taipei,  Seoul,  Manila  and  Hong  Kong.  In  addition,   the  group  maintains
representative  offices  in  other  parts  of  Asia  and  Latin  America  and an
international banking subsidiary in New York.

         GLOBAL MARKETS GROUP

         The Global  Markets Group  conducts  business  activities  primarily to
support the previously described business groups and their customers. This group
offers a broad range of risk management  products,  such as foreign exchange and
interest  rate swaps and caps. It trades money  market,  government,  agency and
other securities to meet investment needs of institutional  and business clients
of the Company.  Another  primary area of the group is treasury risk  management
for the  Company  that  encompasses  wholesale  funding,  liquidity  management,
interest rate risk  management  including  securities  portfolio  management and
hedging activities.

         In the third quarter of 2001, net income  increased  $10.0 million,  or
311 percent,  compared to the prior year quarter.  Total revenue increased $16.5
million,  or 181 percent,  compared to a year earlier primarily resulting from a
120  percent  increase  in net  interest  income and a 315  percent  increase in
noninterest  income.  Net interest income increased $7.4 million compared to the
prior year  mainly due to an increase  in hedge  income  that  offsets our asset
sensitivity in a declining rate environment and growth in earning assets as part
of our asset/liability  management  strategy.  Noninterest income increased $9.0
million  compared to the prior year mainly due to current year gains on the sale
of securities  in our  securities  available  for sale  portfolio as part of our
asset/liability management strategy and current year mark-to-market gains on our
trading securities  portfolio.  Noninterest expense was relatively flat from the
prior year.

         OTHER

         "Other" includes the following items:

         o   corporate  activities that are not directly  attributable to one of
             the four  major  business  units.  Included  in this  category  are
             goodwill  amortization and certain other nonrecurring items such as
             restructuring charges and credits,  merger and integration expense,
             certain parent company non-bank  subsidiaries,  and the elimination
             of the fully taxable-equivalent amounts;

         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  Credit  Management   Group,   containing  the  Special  Assets
             Division,  which  includes  most of the $299.8  million  and $450.2
             million of nonperforming assets for 2000 and 2001, respectively;

         o   the Pacific Rim  Corporate  Group,  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 outside the U.S., mostly in Japan; and

         o   the residual costs of support groups.


                                       26


<PAGE>


         Net loss for "other" in the third quarter of 2001 was $0.8 million. The
results were impacted by the following factors:

         o   Credit  expense of $6.3 million due to the  difference  between the
             $50.0 million in provision for credit losses  calculated  under our
             US GAAP  methodology  and the $43.7 million in expected  losses for
             the  reportable   business  segments,   which  utilizes  the  RAROC
             methodology,

         o   Net  interest  income of $16.9  million,  which  resulted  from the
             differences  between  the  credit  for  equity  for the  reportable
             segments  under  RAROC and the net  interest  income  earned by the
             consolidated  Company,  and a credit  for  demand  deposits  in the
             Pacific Rim Corporate Group,

         o   Noninterest income of $2.1 million, and

         o   Noninterest expense of $25.1 million.

         Net loss for "other" in the third quarter of 2000 was $19.5 million.
The results were impacted by the following factors:

         o   Net  interest  income of $12.1  million,  which  resulted  from the
             differences  between  the  credit  for  equity  for the  reportable
             segments  under  RAROC and the net  interest  income  earned by the
             consolidated Company,

         o   Credit expense of $34.6 million due to the  difference  between the
             $80.0 million in provision for credit losses  calculated  under our
             US GAAP  methodology  and the $45.4 million in expected  losses for
             the  reportable   business  segments,   which  utilizes  the  RAROC
             methodology, and

         o   Noninterest expense of $17.2 million.


                                       27


<PAGE>


NET INTEREST INCOME

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

<TABLE>
<CAPTION>


                                                                    FOR THE THREE MONTHS ENDED
                                          -------------------------------------------------------------------------------------
                                                 SEPTEMBER 30, 2000                             SEPTEMBER 30, 2001
                                          --------------------------------------     ------------------------------------------
                                                           INTEREST      AVERAGE                      INTEREST         AVERAGE
                                            AVERAGE         INCOME/      YIELD/        AVERAGE        INCOME/          YIELD/
(DOLLARS IN THOUSANDS)                      BALANCE       EXPENSE (1)     RATE(1)      BALANCE         EXPENSE (1)     RATE (1)
----------------------                    -----------     -----------    --------    -----------      ------------     --------
<S>                                       <C>               <C>            <C>       <C>               <C>             <C>

ASSETS
Loans:
   Domestic..........................     $25,440,873       $559,071       8.74%     $24,825,234       $442,062         7.08%
   Foreign...........................       1,014,102         17,568       6.89        1,091,866         13,451         4.89
Securities--taxable..................       3,349,476         54,602       6.52        4,853,629         75,728         6.24
Securities--tax-exempt...............          67,962          1,643       9.68           42,501          1,475        13.88
Interest bearing deposits in banks...         174,526          2,775       6.32           61,074            622         4.04
Federal funds sold and securities
   purchased under resale agreements.          74,158          1,263       6.77          164,876          1,398         3.36
Trading account assets...............         278,049          4,200       6.01          303,879          1,691         2.21
                                          -----------       --------                 -----------       --------
        Total earning assets.........      30,399,146        641,122       8.40       31,343,059        536,427         6.81
                                                            --------                                   --------
Allowance for credit losses..........        (521,989)                                  (639,736)
Cash and due from banks..............       2,109,093                                  2,191,527
Premises and equipment, net..........         428,854                                    489,181
Other assets.........................       1,274,966                                  1,232,909
                                          -----------                                -----------
        Total assets.................     $33,690,070                                $34,616,940
                                          ===========                                ===========

LIABILITIES
Domestic deposits:
   Interest bearing..................     $ 5,977,345       $ 41,506       2.76       $5,941,131       $ 33,509         2.24
   Savings and consumer time.........       3,381,638         30,969       3.64        3,481,091         26,605         3.03
   Large time........................       4,602,394         71,931       6.22        4,346,272         45,737         4.18
Foreign deposits.....................       1,764,375         25,506       5.75        1,986,119         15,954         3.19
                                          -----------       --------                 -----------       --------
        Total interest bearing
           deposits..................      15,725,752        169,912       4.30       15,754,613        121,805         3.07
                                          -----------       --------                 -----------       --------
Federal funds purchased and
   securities sold under repurchase
   agreements........................       1,644,888         26,994       6.53        1,413,866         12,265         3.44
Commercial paper.....................       1,595,462         26,072       6.50        1,330,949         11,844         3.53
Other borrowed funds.................         243,854          3,044       4.97          404,629          4,914         4.82
Subordinated capital notes...........         226,630          4,060       7.13          200,000          2,142         4.25
UnionBanCal Corporation--obligated
   mandatorily redeemable preferred
   securities of subsidiary grantor
   trust.............................         350,000          6,414       7.32          352,363          4,940         5.62
                                          -----------       --------                 -----------       --------
        Total borrowed funds.........       4,060,834         66,584       6.53        3,701,807         36,105         3.87
                                          -----------       --------                 -----------       --------
        Total interest bearing
           liabilities...............      19,786,586        236,496       4.76       19,456,420        157,910         3.22
                                                            --------                                   --------
Noninterest bearing deposits.........       9,676,284                                 10,636,680
Other liabilities....................       1,042,033                                  1,026,176
                                          -----------                                -----------
        Total liabilities............      30,504,903                                 31,119,276
SHAREHOLDERS' EQUITY
Common equity........................       3,185,167                                  3,497,664
                                          -----------                                -----------
        Total shareholders' equity...       3,185,167                                  3,497,664
                                          -----------                                -----------
        Total liabilities and
           shareholders' equity......     $33,690,070                                $34,616,940
                                          ===========                                ===========

Net interest income/margin
   (taxable-equivalent basis)........                        404,626       5.30%                        378,517         4.81%
Less: taxable-equivalent adjustment..                            641                                        426
                                                            --------                                   --------
        Net interest income..........                       $403,985                                   $378,091
                                                            ========                                   ========
<FN>
__________________

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

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

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

</FN>
</TABLE>


                                       28


<PAGE>

<TABLE>
<CAPTION>


                                                                    FOR THE NINE MONTHS ENDED
                                          -------------------------------------------------------------------------------------
                                                 SEPTEMBER 30, 2000                             SEPTEMBER 30, 2001
                                          --------------------------------------     ------------------------------------------
                                                           INTEREST      AVERAGE                      INTEREST         AVERAGE
                                            AVERAGE         INCOME/      YIELD/        AVERAGE        INCOME/          YIELD/
(DOLLARS IN THOUSANDS)                      BALANCE       EXPENSE (1)     RATE(1)      BALANCE         EXPENSE (1)     RATE (1)
----------------------                    -----------     -----------    --------    -----------      ------------     --------
<S>                                       <C>               <C>            <C>       <C>               <C>             <C>

ASSETS
Loans:
   Domestic...................            $25,248,387      $1,622,722        8.59%   $25,093,475       $1,433,167        7.63%
   Foreign....................              1,055,534          53,386        6.76      1,054,397           45,873        5.82
Securities--taxable............             3,290,918         159,204        6.45      4,477,761          212,030        6.31
Securities--tax-exempt.........                69,078           5,134        9.91         57,943            4,731       10.89
Interest bearing deposits in
   banks......................                193,050           7,522        5.20         68,631            2,249        4.38
Federal funds sold and
   securities purchased under
   resale agreements..........                137,987           6,364        6.16        142,965            4,585        4.29
Trading account assets........                272,626          12,281        6.02        333,906            6,817        2.73
                                          -----------      ----------                -----------       ----------
        Total earning assets..             30,267,580       1,866,613        8.23     31,229,078        1,709,452        7.31
                                                           ----------                                  ----------
Allowance for credit losses...               (500,137)                                  (635,230)
Cash and due from banks.......              2,111,443                                  2,204,603
Premises and equipment, net...                425,880                                    484,682
Other assets..................              1,215,413                                  1,262,310
                                          -----------                                -----------
        Total assets..........            $33,520,179                                $34,545,443
                                          ===========                                ===========

LIABILITIES
Domestic deposits:
   Interest bearing...........            $ 5,942,695       $ 117,648        2.64    $ 5,999,738       $  110,321        2.46
   Savings and consumer time..              3,395,513          89,318        3.51      3,394,569           84,878        3.34
   Large time.................              4,581,849         203,659        5.94      4,600,627          171,195        4.98
Foreign deposits..............              1,869,177          76,872        5.49      1,985,523           60,944        4.10
                                          -----------      ----------                -----------       ----------
        Total interest bearing
           deposits...........             15,789,234         487,497        4.12     15,980,457          427,338        3.58
                                          -----------      ----------                -----------       ----------
Federal funds purchased and
   securities sold under
   repurchase agreements......              1,573,315          72,383        6.15      1,419,912           48,687        4.58
Commercial paper..............              1,539,749          71,004        6.16      1,383,999           46,882        4.53
Other borrowed funds..........                366,568          14,212        5.18        456,195           16,630        4.87
Subordinated capital notes....                274,036          13,997        6.82        200,000            7,873        5.26
UnionBanCal
   Corporation--obligated
   mandatorily redeemable
   preferred securities of
   subsidiary grantor trust...                350,000          19,788        7.53        352,215           16,329        6.18
                                          -----------      ----------                -----------       ----------
        Total borrowed funds..              4,103,668         191,384        6.23      3,812,321          136,401        4.78
                                          -----------      ----------                -----------       ----------
        Total interest bearing
           liabilities........             19,892,902         678,881        4.56     19,792,778          563,739        3.81
                                                           ----------                                  ----------
Noninterest bearing deposits..              9,530,873                                 10,288,593
Other liabilities.............              1,001,029                                  1,049,511
                                          -----------                                -----------
        Total liabilities.....             30,424,804                                 31,130,882
SHAREHOLDERS' EQUITY
Common equity.................              3,095,375                                  3,414,561
                                          -----------                                -----------
        Total shareholders'
           equity.............              3,095,375                                  3,414,561
                                          -----------                                -----------
        Total liabilities and
           shareholders' equity           $33,520,179                                $34,545,443
                                          ===========                                ===========


Net interest income/margin
   (taxable-equivalent basis).                              1,187,732        5.23%                      1,145,713        4.90%
Less: taxable-equivalent
   adjustment.................                                  1,933                                       1,638
                                                           ----------                                  ----------
        Net interest income...                             $1,185,799                                  $1,144,075
                                                           ==========                                  ==========

<FN>
__________________

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

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

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

</FN>
</TABLE>


         Net interest  income is interest  earned on loans and  securities  less
interest expense on deposit accounts and borrowings.  Primary factors  affecting
the level of net interest  income include the margin between the yield earned on
interest  earning assets and the rate paid on interest bearing  liabilities,  as
well as the  volume  and  composition  of average  interest  earning  assets and
average interest bearing liabilities.


                                       29


<PAGE>


         THREE MONTHS ENDED SEPTEMBER 30, 2000 AND SEPTEMBER 30, 2001

         Net interest income, on a taxable-equivalent  basis, was $378.5 million
in the third quarter of 2001,  compared with $404.6 million in the third quarter
of 2000.  This  decrease  of  $26.1  million,  or 6  percent,  was  attributable
primarily to a lower net interest margin which was  unfavorably  impacted by the
declining  interest rate environment and a strategic shift in our loan portfolio
to  increase  the  mix of less  volatile  residential  real  estate  loans.  The
declining  interest  environment  contributed to lower yields on loans and other
interest  earning  assets,  which was only  partially  offset by lower  rates on
deposits,  which have not repriced as rapidly as our interest-sensitive  assets.
The lower interest rate environment  resulted in lower yields on average earning
assets of 159 basis  points,  coupled with lower rates paid on average  interest
bearing  liabilities of 154 basis points.  The net interest margin  decreased 49
basis points to 4.81 percent.

         Average earning assets were $31.3 billion in the third quarter of 2001,
compared  with $30.4  billion  in the third  quarter  of 2000.  This  growth was
attributable to a $1.5 billion,  or 43 percent,  increase in average securities.
The increase in average securities,  which was comprised primarily of fixed rate
available  for sale  securities,  reflected  liquidity  and  interest  rate risk
management  actions.  Although  average  loans  were  slightly  lower by  $537.9
million,  or 2  percent,  over  the  third  quarter  of  2000,  the loan mix has
substantially  changed.  The decrease in average  loans was mostly due to a $1.9
billion decrease in average  commercial  loans,  mostly offset by an increase in
average  residential  mortgages of $1.6 billion,  both of which  resulted from a
strategic  portfolio  shift from more volatile  commercial  loans.  In addition,
average  real  estate  construction  loans  increased  $220.3  million,  average
consumer loans  decreased  $340.4  million,  average lease  financing  decreased
$139.2 million, and average commercial mortgages decreased $14.7 million.

         Average  noninterest  bearing  deposits  of $10.6  billion  were $960.4
million, or 10 percent, higher over the third quarter of 2000.

         NINE MONTHS ENDED SEPTEMBER 30, 2000 AND SEPTEMBER 30, 2001

         Net  interest  income,  on a  taxable-equivalent  basis,  was  $1,145.7
million in the first nine months of 2001,  compared with $1,187.7 million in the
first nine months of 2000.  This decrease of $42.0  million,  or 4 percent,  was
attributable  primarily to a lower net interest  margin,  which was  unfavorably
impacted by the declining interest rate environment and a strategic shift in our
loan  portfolio  to  increase  the  mix of less  volatile,  yet  lower  yielding
residential real estate loans. The declining interest environment contributed to
lower yields on loans and other interest  bearing assets and lower rates on most
interest  bearing  liabilities;  however,  we continued to  experience  slightly
higher  rates on interest  bearing  core  deposits,  which have not  repriced as
rapidly as our  interest-sensitive  assets  mainly due to increased  competitive
pricing on these products.  The overall lower interest rate environment resulted
in lower yields on average earning assets of 92 basis points, coupled with lower
rates paid on average interest bearing  liabilities of 75 basis points.  The net
interest margin decreased 33 basis points to 4.90 percent.

         Average  earning  assets were $31.2 billion in the first nine months of
2001,  compared with $30.3 billion in the first nine months of 2000. This growth
was  attributable  to a  $1.2  billion,  or  35  percent,  increase  in  average
securities. The increase in average securities, which was comprised primarily of
fixed rate available for sale securities,  reflected liquidity and interest rate
risk management  actions.  Although  average loans were relatively flat over the
first  nine  months of 2000,  the loan mix has  substantially  changed.  Average
residential  mortgages  were higher by $1.2  billion and  commercial  loans were
lower by $1.1 billion,  both of which resulted from a strategic  portfolio shift
from  more  volatile   commercial  loans.  In  addition,   average  real  estate
construction  loans increased  $241.2 million,  average consumer loans decreased
$293.7 million,  average  commercial  mortgages  decreased  $115.8 million,  and
average lease financing decreased $83.6 million.

         Average noninterest bearing deposits were $757.7 million, or 8 percent,
higher over the first nine months of 2000.


                                       30


<PAGE>


<TABLE>
<CAPTION>

NONINTEREST INCOME



                                       FOR THE THREE MONTHS ENDED                            FOR THE NINE MONTHS ENDED
                                -------------------------------------------       -------------------------------------------
                                SEPTEMBER 30,     SEPTEMBER 30,     PERCENT       SEPTEMBER 30,     SEPTEMBER 30,     PERCENT
(DOLLARS IN THOUSANDS)                   2000              2001      CHANGE                2000              2001      CHANGE
------------------------        -------------     -------------     -------       -------------     -------------     -------
<S>                                   <C>              <C>            <C>              <C>              <C>             <C>

Service charges on
   deposit accounts....               $53,779          $ 62,742       16.67%           $153,987         $181,614        17.94%
Trust and investment
   management fees.....                39,975            37,965       (5.03)            116,163          116,880         0.62
Merchant transaction
   processing fees.....                19,354            21,315       10.13              54,887           60,814        10.80
International
   commissions and fees                18,012            18,053        0.23              53,463           53,288        (0.33)
Brokerage commissions
   and fees............                 8,616             8,786        1.97              27,309           26,764        (2.00)
Merchant banking fees..                15,353             7,742      (49.57)             40,681           26,671       (34.44)
Gain on exchange of STAR
   System stock........                    --                --          --                  --           20,700           nm
Securities gains
   (losses), net.......                 3,104           (1,699)     (154.74)              8,804            4,318       (50.95)
Other..................                10,735            18,501       72.34              38,714           31,554       (18.49)
                                     --------          --------                        --------         --------
Total noninterest income             $168,928          $173,405        2.65%           $494,008         $522,603         5.79%
                                     ========          ========                        ========         ========

<FN>
__________________

nm       = not meaningful

</FN>
</TABLE>


         THREE MONTHS ENDED SEPTEMBER 30, 2000 AND SEPTEMBER 30, 2001

         In the third quarter of 2001, noninterest income was $173.4 million, an
increase  of $4.5  million,  or 3 percent,  over the same  period in 2000.  This
increase was primarily  attributed to a $9.0 million increase in service charges
on deposit accounts,  no auto lease residual  writedowns in the third quarter of
2001 compared to $5.0 million in the third  quarter of 2000,  and a $2.0 million
increase in merchant  transaction  processing  fees,  partially offset by a $7.6
million  decrease in merchant  banking fees and a $2.0 million decrease in trust
and investment management fees. Securities gains, net decreased $4.8 million.

         Revenue from service charges on deposit accounts was $62.7 million,  an
increase  of 17  percent  over the  third  quarter  of 2000.  The  increase  was
primarily  attributable  to a 4 percent  increase in average  deposits and lower
earnings credits on customer deposit balances.

         Trust and  investment  management  fees were  $38.0  million  for third
quarter  2001,  a decrease  of 5 percent  over the same prior year  period.  The
decrease was primarily  attributed to current market conditions and their impact
on transaction and asset-based  fees. In addition,  the current quarter includes
incremental  revenue of $1.8 million  resulting  from the  acquisition of Copper
Mountain Trust Company, which occurred on January 31, 2001.

         Merchant transaction processing fees were $21.3 million, an increase of
10 percent over the third quarter of 2000.  The increase was primarily due to an
increase in the volume of merchant credit card drafts.

         Merchant banking fees were $7.7 million,  a decrease of 50 percent from
third  quarter  2000.  The  decrease  was  primarily  due to  lower  demand  for
syndication  and  investment  banking  activities as a result of current  market
conditions.

         Securities  losses,  net, were $1.7 million,  compared with  securities
gains,  net,  of $3.1  million in the third  quarter of 2000.  In the prior year
quarter, we had realized gains of $3.1 million,  which were primarily related to
various  venture capital and equities  investments.  In the current year, we had
permanent   writedowns   of  $9.5  million  on  venture   capital  and  equities
investments,  partially  offset by realized gains of $7.5 million on the sale of
securities  in our  securities  available  for  sale  portfolio  as  part of our
asset/liability  management  strategy  and  realized  gains of $0.3  million  on
venture capital and equity investments.


                                       31


<PAGE>


         NINE MONTHS ENDED SEPTEMBER 30, 2000 AND SEPTEMBER 30, 2001

         In the  first  nine  months  of 2001,  noninterest  income  was  $522.6
million,  an increase of $28.6  million,  or 6 percent,  over the same period in
2000.  This increase was  primarily  due to a $27.6 million  increase in service
charges on deposit  accounts,  a $20.7  million gain  recognized  when our stock
holding in STAR System was exchanged  for Concord EFS stock,  and a $5.9 million
increase in merchant  transaction  processing fees,  partially offset by a $14.0
million decrease in merchant banking fees, higher auto lease residual writedowns
of $10.8 million in the current  year,  and a $4.1 million gain on the sale of a
building in the prior year. In addition,  securities gains, net were 51 percent,
or $4.5 million, lower than the first nine months of 2000.

         Revenue from service charges on deposit accounts was $181.6 million, an
increase of 18 percent  over the first nine  months of 2000.  The  increase  was
primarily  attributable  to a 4 percent  increase  in  average  deposits,  lower
earnings credits on customer deposit balances,  and higher overdraft fees due to
a change in fee structures in 2000.

         Trust and investment  management fees were $116.9 million for the first
nine months of 2001,  an increase of 1 percent  over the same prior year period.
This growth is  attributable  to $4.4 million in incremental  revenue  resulting
from the acquisition of Copper Mountain Trust Company, which occurred on January
31, 2001.  Excluding  Copper  Mountain  Trust  Company,  fees from  pre-existing
businesses were lower year-over-year  primarily due to current market conditions
and their impact on transaction and asset-based fees.

         Merchant transaction processing fees were $60.8 million, an increase of
11 percent over the first nine months of 2000. The increase was primarily due to
an increase in the volume of merchant credit card drafts.

         Merchant banking fees were $26.7 million, a decrease of 34 percent from
the first nine months of 2000.  The decrease was  primarily  due to lower demand
for syndication and investment  banking activities as a result of current market
conditions.

         Securities gains, net, were $4.3 million, a decrease of 51 percent over
the first nine months of 2000.  In the current  year,  we had realized  gains of
$23.9  million  including  gains  of  $9.7  million  on  the  securities  in our
securities   available  for  sale  portfolio  as  part  of  our  asset/liability
management  strategy,  a $9.5 million gain on the sale of our Concord EFS stock,
and $4.6  million  in  realized  gains,  net,  on  venture  capital  and  equity
investments,  which were  partially  offset by permanent  writedowns  on venture
capital and equity investments of $19.6 million.


                                       32


<PAGE>

<TABLE>
<CAPTION>



NONINTEREST EXPENSE



                                       FOR THE THREE MONTHS ENDED                            FOR THE NINE MONTHS ENDED
                                 ---------------------------------------------       -----------------------------------------------
                                 SEPTEMBER 30,        SEPTEMBER 30,    PERCENT       SEPTEMBER 30,        SEPTEMBER 30,     PERCENT
(DOLLARS IN THOUSANDS)                    2000                 2001     CHANGE                2000                 2001      CHANGE
------------------------         -------------        -------------    -------       -------------        -------------     -------
<S>                                   <C>                  <C>           <C>              <C>                  <C>             <C>

Salaries and other
   compensation.........              $130,085             $140,147      7.73%            $387,411             $408,413        5.42%
Employee benefits.......                22,142               31,025      40.12              57,072               91,830       60.90
                                      --------             --------                       --------             --------
   Salaries and employee
      benefits..........               152,227              171,172      12.45             444,483              500,243       12.54
Net occupancy...........                24,664               23,779     (3.59)              69,358               70,375        1.47
Equipment...............                15,702               16,985       8.17              47,706               48,252        1.14
Merchant transaction
   processing...........                12,784               13,324       4.22              37,144               39,687        6.85
Communications..........                11,736               13,074      11.40              33,048               36,582       10.69
Professional services...                10,760                9,982     (7.23)              29,278               29,155       (0.42)
Advertising and public
   relations............                 8,042               10,084      25.39              20,546               28,134       36.93
Data processing.........                 8,577                8,885       3.59              26,199               26,935        2.81
Software................                 5,850                8,250      41.03              16,831               22,614       34.36
Intangible asset
   amortization.........                 3,338                3,635       8.90              10,014               10,806        7.91
Foreclosed asset expense
   (income).............                  (14)                 (60)     328.57                   7                    1      (85.71)
Restructuring credit....                    --                   --         --            (19,000)                   --     (100.00)
Other...................                37,712               37,932       0.58             114,121              119,195        4.45
                                      --------             --------                       --------             --------
      Total noninterest
        expense.........              $291,378             $317,042      8.81%            $829,735             $931,979      12.32%
                                      ========             ========                       ========             ========

</TABLE>


         THREE MONTHS ENDED SEPTEMBER 30, 2000 AND SEPTEMBER 30, 2001

         In the third quarter of 2001,  noninterest  expense was $317.0 million,
an increase of $25.7 million,  or 9 percent,  over the same period in 2000. This
increase  was mostly due to an $18.9  million  increase in salaries and employee
benefits,  a $2.4  million  increase in  software  expense,  and a $2.0  million
increase in advertising and public relations expense.

         Salaries and employee  benefits were $171.2 million,  an increase of 12
percent over the third  quarter of 2000.  This  increase was primarily due to an
increase in salaries and employee  benefits  necessary to achieve our  strategic
goals to expand key  businesses,  annual  merit  increases,  and an  increase in
health  insurance  expense  partially due to lower company owned life  insurance
(COLI) income of $2.9 million in the current quarter.

         Advertising and public relations expense was $10.1 million, an increase
of 25 percent,  over the third quarter of 2000 primarily  attributable to higher
marketing   expenditures  on  programs  targeted  toward  increasing  growth  in
deposits, small business relationships, and residential mortgages.

         Software expense was $8.3 million, an increase of 41 percent,  over the
third quarter of 2000 primarily from higher software  amortization  and software
maintenance  contract  expenses  related  to  the  implementation  of  ebusiness
initiatives.

         NINE MONTHS ENDED SEPTEMBER 30, 2000 AND SEPTEMBER 30, 2001

         In the first  nine  months  of 2001,  excluding  the  first and  second
quarter 2000 restructuring  credits,  noninterest expense was $932.0 million, an
increase of $83.2  million,  or 10 percent,  over the same period in 2000.  This
increase  was mostly due to a $55.8  million  increase in salaries  and employee
benefits, a $7.6 million increase in advertising and public relations expense, a
$5.8 million increase in software  expense,  and a $14.1 million increase in all
other noninterest expenses.

         Salaries and employee  benefits were $500.2 million,  an increase of 13
percent over the first nine months of 2000. This increase was primarily due to a
one-time  credit for an accounting  methodology  change in  recognizing  pension
expense of $16.0 million in the first quarter of 2000, an increase in salaries


                                       33


<PAGE>


and employee  benefits  necessary to achieve our  strategic  goals to expand key
businesses,  annual  merit  increases,  and  higher  health  insurance  expenses
partially due to lower COLI income in the current year.

         Advertising and public relations expense was $28.1 million, an increase
of 37  percent  over the first nine  months of 2000  primarily  attributable  to
higher marketing  expenditures on programs  targeted toward increasing growth in
deposits, small business relationships, and residential mortgages.

         Software expense was $22.6 million, an increase of 34 percent, over the
third quarter of 2000 primarily from higher software  amortization  and software
maintenance  contract  expenses  related  to  the  implementation  of  ebusiness
initiatives.

         All other  noninterest  expense  was $381.0  million,  an increase of 4
percent over the first nine months of 2000 due to the  recognition  of a loss of
$6.2 million at adoption of Statement of Financial  Accounting  Standards (SFAS)
No.  133,  higher  operating  losses  of $4.4  million  including  higher  legal
settlements  and  forgery  losses in the first nine  months of 2001,  and higher
derivative-related  expenses  of $3.6  million  due to changes in the value of a
portion of the interest  rate options  that are excluded  from hedge  accounting
under SFAS No. 133.

INCOME TAX EXPENSE

         Income tax expense in the third quarter of 2001 was $59.3 million, a 32
percent  effective income tax rate. For the third quarter of 2000, the effective
income tax rate was 35 percent.

         Income tax expense in the first nine months of 2001 was $170.1 million,
a 33 percent  effective  income tax rate. For the first nine months of 2000, the
effective income tax rate was 35 percent.

         The decrease in the  year-over-year  effective income tax rates for the
third quarter and first nine months of the year was  primarily  attributed to an
increase in low income housing tax credits in the first nine months of 2001.


                                       34


<PAGE>


LOANS

         The following table shows loans outstanding by loan type.

<TABLE>
<CAPTION>


                                                                                                       PERCENT CHANGE TO
                                                                                                   SEPTEMBER 30, 2001 FROM:
                                      SEPTEMBER 30,       DECEMBER 31,       SEPTEMBER 30,         SEPTEMBER 30,       DECEMBER 31,
(DOLLARS IN THOUSANDS)                     2000               2000               2001                  2000                2000
----------------------------          -------------       ------------       -------------         -------------       ------------
<S>                                     <C>                <C>                 <C>                      <C>                <C>

Domestic:
   Commercial, financial and
      industrial............            $14,207,319        $13,748,838         $12,227,368                (13.94)%          (11.07)%
   Construction.............                944,263            939,302           1,119,854                 18.60             19.22
   Mortgage:
      Residential...........              2,984,627          3,294,485           4,537,854                 52.04             37.74
      Commercial............              3,373,801          3,348,252           3,434,037                  1.79              2.56
                                        -----------        -----------         -----------
        Total mortgage......              6,358,428          6,642,737           7,971,891                 25.38             20.01
   Consumer:
      Installment...........              1,752,292          1,655,676           1,326,056                (24.32)           (19.91)
      Home equity...........                736,835            755,053             810,188                  9.96              7.30
                                        -----------        -----------         -----------
        Total consumer......              2,489,127          2,410,729           2,136,244                (14.18)           (11.39)
   Lease financing..........              1,148,314          1,134,440             981,290                (14.55)           (13.50)
                                        -----------        -----------         -----------
        Total loans in domestic
          offices...........             25,147,451         24,876,046          24,436,647                 (2.83)            (1.77)
Loans originated in foreign
   branches.................              1,010,488          1,134,352           1,157,642                 14.56              2.05
                                        -----------        -----------         -----------
        Total loans.........            $26,157,939        $26,010,398         $25,594,289                 (2.15)%           (1.60)%
                                        ===========        ===========         ===========
</TABLE>


         Our lending  activities  are  predominantly  domestic,  with such loans
comprising 95 percent of the total loan  portfolio at September 30, 2001.  Total
loans at September 30, 2001 were $25.6  billion,  a decrease of 2 percent,  over
the prior  year.  The  decrease  was  mainly  attributable  to a decline  in the
commercial,  financial and  industrial  loan  portfolio,  which  decreased  $2.0
billion, partially offset by the residential mortgage portfolio, which increased
$1.6 billion.  In addition,  the  construction  loan portfolio  increased $175.6
million, the commercial mortgage portfolio increased $60.2 million, the consumer
loan portfolio  decreased  $352.9  million,  and the lease  financing  portfolio
decreased $167.0 million.

         Commercial,  financial  and  industrial  loans  represent  the  largest
category  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 commercial, financial and industrial
loans. At September 30, 2001 and 2000, the commercial,  financial and industrial
loan  portfolio  was $12.2  billion,  or 48  percent of total  loans,  and $14.2
billion,  or 54 percent  of total  loans,  respectively.  The  decrease  of $2.0
billion, or 14 percent,  from the prior year was primarily  attributable to loan
sales and reductions in our exposures in  nonrelationship  syndicated loans. The
nonrelationship  syndicated  loan  portfolio,  which comprises an estimated $1.1
billion of our total commercial,  financial,  and industrial loans, has caused a
disproportionate  share of our credit  problems.  The  reduction in  commercial,
financial,  and industrial  loans is consistent  with our strategy to reduce our
exposure in more volatile  commercial  loans and increase the percentage of more
stable residential mortgages.

         The construction loan portfolio  totaled $1.1 billion,  or 4 percent of
total loans, at September 30, 2001,  compared with $944.3 million,  or 4 percent
of total loans,  at September  30, 2000.  This growth of $175.6  million,  or 19
percent, from the prior year was primarily  attributable to a reasonably stable,
but slowing, California real estate market and West Coast economy during 2001.


                                       35


<PAGE>


         Commercial  mortgages were $3.4 billion,  or 13 percent of total loans,
at September  30, 2001 and  September  30, 2000.  The  commercial  mortgage loan
portfolio  consists of loans on commercial and industrial  projects primarily in
California. The increase in commercial mortgages of $60.2 million, or 2 percent,
from  September 30, 2000,  was also  primarily due to a reasonably  stable,  but
slowing, California real estate market and West Coast economy during 2001.

         Residential  mortgages were $4.5 billion, or 18 percent of total loans,
at September 30, 2001, compared with $3.0 billion, or 11 percent of total loans,
at  September  30,  2000.  The  residential   mortgage   portfolio  consists  of
residential loans secured by one-to-four family residential properties primarily
in  California.  The increase in  residential  mortgages of $1.6 billion,  or 52
percent,  from September 30, 2000,  was influenced by our strategic  decision to
increase our residential  mortgage portfolio through additional channels such as
wholesale  and  correspondent,  and to a  lesser  extent,  the bulk  whole  loan
purchase channel.

         Consumer  loans totaled $2.1 billion,  or 8 percent of total loans,  at
September 30, 2001, compared with $2.5 billion, or 10 percent of total loans, at
September 30, 2000. The decrease of $352.9 million, or 14 percent, was primarily
attributable  to exiting the  automobile  dealer  lending  business in the third
quarter of 2000, partially offset by an increase in home equity loans.

         Lease financing  totaled $1.0 billion,  or 4 percent of total loans, at
September 30, 2001,  compared with $1.1 billion, or 4 percent of total loans, at
September  30, 2000. As we previously  announced,  effective  April 20, 2001, we
discontinued our auto leasing activity.

         Loans originated in foreign branches totaled $1.2 billion, or 5 percent
of total loans,  at September 30, 2001 and $1.0  billion,  or 4 percent of total
loans, at September 30, 2000.

CROSS-BORDER OUTSTANDINGS

         Our cross-border  outstandings  reflect certain additional economic and
political  risks that are not  reflected in domestic  outstandings.  These risks
include those arising from exchange rate  fluctuations  and  restrictions on the
transfer of funds. The following table sets forth our cross-border  outstandings
as of September  30, 2000,  December  31, 2000 and  September  30, 2001 for each
country  where  such  outstandings  exceeded  1  percent  of total  assets.  The
cross-border  outstandings  were  compiled  based upon  category and domicile of
ultimate risk and are comprised of balances with banks,  trading account assets,
securities  available for sale,  securities  purchased under resale  agreements,
loans, accrued interest receivable, acceptances outstanding and investments with
foreign  entities.  The  amounts  outstanding  for each  country  exclude  local
currency outstandings.  For those individual countries shown in the table below,
we do not have significant  local currency  outstandings  that are not hedged or
are not funded by local currency borrowings.

<TABLE>
<CAPTION>

                                                                                       PUBLIC        CORPORATIONS
                                                                      FINANCIAL        SECTOR          AND OTHER            TOTAL
(DOLLARS IN MILLIONS)                                               INSTITUTIONS      ENTITIES         BORROWERS        OUTSTANDINGS
------------------------------------------------------------        ------------      --------       ------------       ------------
<S>                                                                         <C>             <C>               <C>               <C>

September 30, 2000
Korea.......................................................                $332           $--                $34               $366
December 31, 2000
Korea.......................................................                 507            --                 46                553
September 30, 2001
Korea.......................................................                 470            --                  5                475

</TABLE>


PROVISION FOR CREDIT LOSSES

         We recorded a $50.0  million  provision  for credit losses in the third
quarter of 2001,  compared with a $80.0  million  provision for credit losses in
the third  quarter of 2000.  The  provision  for credit losses in the


                                       36



<PAGE>

first nine months ended September 30, 2001 was $215.0  million,  compared with a
$190.0  million  provision for credit losses in the nine months ended  September
30,  2000.  Provisions  for  credit  losses  are  charged to income to bring our
allowance for credit losses to a level deemed appropriate by management based on
the factors discussed under "Allowance for Credit Losses" below.

         Our  provision  for credit  losses in the third  quarter and first nine
months of 2001 considered the following:

         o   The continuing application of stricter standards to the definitions
             of potential and well-defined weaknesses in our loan portfolio,

         o   The current  quarter  improvement  in asset quality in our domestic
             commercial loan portfolio, and

         o   An overall improvement in the risk profile of our loan portfolio.

ALLOWANCE FOR CREDIT LOSSES

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

         The  formula  allowance  is  calculated  by  applying  loss  factors to
outstanding  loans and  certain  unused  commitments,  in each case based on the
internal  risk grade of such  loans,  pools of loans,  leases  and  commitments.
Changes in risk grades of both  performing  and  nonperforming  loans affect the
amount of the formula  allowance.  Loss factors are based on our historical loss
experience  and may be adjusted for  significant  factors that, in  management's
judgment,  affect the collectibility of the portfolio as of the evaluation date.
During the third quarter of 2001, we refined our  methodology to more accurately
calculate  loss factors for  commercial  pass graded  credits.  Loss factors are
developed in the following ways:

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

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

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

         We believe that a business  cycle is a period in which both upturns and
downturns in the economy have been reflected.  The long-term  nature of the most
recent  economic cycle has required us to extend our  historical  perspective to
capture the highs and lows of a more typical economic cycle.

         Specific  allowances  are  established  in cases where  management  has
identified  significant  conditions or circumstances  related to an individually
impaired credit that management  believes  indicate the probability  that a loss
has been incurred.  This amount may be determined  either by a method prescribed
by SFAS No. 114,  "Accounting  by Creditors for  Impairment of a Loan",  or by a
method which identifies certain qualitative factors.


                                       37


<PAGE>


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

         o   General economic and business conditions  affecting our key lending
             areas,

         o   Credit  quality trends  (including  trends in  nonperforming  loans
             expected to result from existing conditions),

         o   Collateral values,

         o   Loan volumes and concentrations,

         o   Seasoning of the loan portfolio,

         o   Specific industry conditions within portfolio segments,

         o   Recent loss experience in particular segments of the portfolio,

         o   Duration of the current business cycle,

         o   Bank regulatory examination results, and

         o   Findings of our internal credit examiners.

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

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

         COMPARISON OF THE TOTAL ALLOWANCE AND RELATED PROVISION FOR CREDIT
         LOSSES FROM DECEMBER 31, 2000

         During the third  quarter of 2001,  there were no changes in estimation
methods  or  assumptions   that  affected  our  methodology  for  assessing  the
appropriateness  of the  formula  and  specific  allowances  for credit  losses.
Changes in  estimates  and  assumptions  regarding  the effects of economic  and
business  conditions on borrowers and other factors,  which are described below,
also affected the assessment of the unallocated  allowance.  However, we refined
our methodology for pass graded, commercial, financial and


                                       38


<PAGE>


industrial lending by utilizing the same migration model used for problem graded
credits.  This change did not have a material effect on our allowance for credit
losses.

         At December 31, 2000,  our total  allowance  for credit losses was $614
million or 2.36  percent of the total loan  portfolio  and 153  percent of total
nonaccrual  loans.  At September 30, 2001, our total allowance for credit losses
was $630 million, or 2.46 percent of the total loan portfolio and 142 percent of
total nonaccrual loans. In addition,  the allowance  incorporates the results of
measuring  impaired  loans  as  provided  in SFAS  No.  114 and  SFAS  No.  118,
"Accounting  by Creditors  for  Impairment  of a  Loan--Income  Recognition  and
Disclosures".  These  accounting  standards  prescribe the measurement  methods,
income  recognition and  disclosures  related to impaired loans. At December 31,
2000,  total  impaired loans were $400 million,  and the  associated  impairment
allowance  was  $118  million  compared  with  $445  million  and  $54  million,
respectively, at September 30, 2001. In addition, the formula allowance includes
amounts for those loans evaluated for impairment on a collective basis.

         We recorded a $50 million  provision in the third  quarter of 2001 as a
result of  management's  assessment  of  factors,  including  the  weakening  US
economy, affecting elements of the communication/media,  insurance, agriculture,
real estate, and other companies in domestic markets in which we operate and the
growth  in, and  changes  in the  composition  of,  the loan  portfolio.  Losses
inherent  in these  types  of  credits  are more  difficult  to  assess  because
historically these have been more volatile than losses from other credits.

         CHANGES IN THE FORMULA, SPECIFIC ALLOWANCES, AND UNALLOCATED ALLOWANCES
         FROM DECEMBER 31, 2000

         At September 30, 2001, the formula allowance was $374 million, compared
to $380 million at December 31, 2000, representing a decrease of $6 million.

         At September 30, 2001, the specific  allowance was $95 million compared
to $133  million at  December  31,  2000,  a decrease of $38  million.  This was
primarily due to charge-offs.

         Our problem  credits  continue to be  centered in the  commercial  loan
portfolio and mostly within  syndicated loan purchases.  At this time, we see no
significant deterioration in the real estate or consumer loan portfolios.

         At  September  30, 2001,  the  unallocated  allowance  was $161 million
compared to $101 million at December 31,  2000,  an increase of $60 million.  In
evaluating the appropriateness of the unallocated  allowance,  we considered the
following  factors,  as well as more general factors,  such as the interest rate
environment and the impact of the economic  downturn on those borrowers who have
a more leveraged financial profile:

         o   the need to  provide  for the  adverse  effects  of the  California
             energy crisis, which was eliminated,  due to the absence of rolling
             blackouts during the summer of 2001,

         o   the  continued   adverse   effects  of  changes  in  the  economic,
             regulatory,   and  technology  environments  on  borrowers  in  the
             communications/media  industry,  which could be in the range of $19
             million to $40 million,

         o   the adverse effects of the weakening  economy and slowing trends in
             consumer  spending on borrowers in the  retailing  industry,  which
             could be in the range of $18 million to $37 million,

         o   the adverse  effects of the  well-publicized  problems of the large
             public utilities and the independent power producers in California,
             which have been  partially  recognized  through  downgrades,  which
             could be in the range of $4 million to $17 million,

         o   the adverse effects of the weakening California economy on the real
             estate  industry  in  the  San  Francisco  Bay  Area  and  Northern
             California,  which  could  be in the  range  of $6  million  to $13
             million,


                                       39

<PAGE>


         o   the adverse effects of the September 11, 2001 terrorist attacks and
             resulting insurance claims on the insurance  industry,  which could
             be in the range of $5 million to $12 million,

         o   the adverse effects of  overproduction  and foreign  supply,  which
             have lowered  commodity  prices on certain crops in the agriculture
             industry, which could be in the range of $5 million to $11 million,
             and

         o   the adverse effects of declining  product life cycles and a slowing
             demand  for  personal  computers  on  borrowers  in the  technology
             industry, which could be in the range of $5 million to $11 million.

         There  can be no  assurance  that the  adverse  impact  of any of these
conditions  on us will not be in  excess of the  ranges  set  forth  above.  See
"Certain Business Risks Factors" on page 44.

         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              FOR THE NINE
                                                                                        MONTHS ENDED              MONTHS ENDED
                                                                                       SEPTEMBER 30,             SEPTEMBER 30,
                                                                                   ----------------------     ---------------------
(DOLLARS IN THOUSANDS)                                                               2000          2001         2000         2001
----------------------------------------------------------------------------       --------      --------     --------     --------
<S>                                                                                <C>           <C>          <C>          <C>

Balance, beginning of period................................................       $500,731      $626,537     $470,378     $613,902
Loans charged off:
   Commercial, financial and industrial.....................................         55,855        65,974      140,629      230,680
   Construction.............................................................             --           567           --          567
   Mortgage.................................................................             18            37          133           95
   Consumer.................................................................          2,867         3,299        8,861        9,534
   Lease financing..........................................................            827           807        2,158        2,595
                                                                                   --------      --------     --------     --------
      Total loans charged off...............................................         59,567        70,684      151,781      243,471
Recoveries of loans previously charged off:
   Commercial, financial and industrial.....................................          3,123        22,467       11,766       40,477
   Mortgage.................................................................             30            --          156           24
   Consumer.................................................................          1,534         1,027        5,047        3,279
   Lease financing..........................................................            128           282          455          601
   Foreign(1)...............................................................             --            --           --           14
                                                                                   --------      --------     --------     --------
      Total recoveries of loans previously charged off......................          4,815        23,776       17,424       44,395
                                                                                   --------      --------     --------     --------
        Net loans charged off...............................................         54,752        46,908      134,357      199,076
Provision for credit losses.................................................         80,000        50,000      190,000      215,000
Foreign translation adjustment and other net additions (deductions).........            (83)           54         (125)        (143)
                                                                                   --------      --------     --------     --------
Balance, end of period......................................................       $525,896      $629,683     $525,896     $629,683
                                                                                   ========      ========     ========     ========

Allowance for credit losses to total loans..................................           2.01%         2.46%        2.01%        2.46%
Provision for credit losses to net loans charged off........................         146.11        106.59       141.41       108.00
Net loans charged off to average loans outstanding for the period(2)........           0.82          0.72         0.68         1.02


<FN>
__________________

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

(2)      Annualized.

</FN>
</TABLE>


         Total loans charged off in the third quarter of 2001 increased by $11.1
million  from the  third  quarter  of 2000,  due  primarily  to a $10.1  million
increase in commercial,  financial and industrial loans charged off.



                                       40

<PAGE>


Charge-offs  reflect  the  realization  of  losses  in the  portfolio  that were
recognized previously through provisions for credit losses.

         The  third  quarter's   recoveries  of  loans  previously  charged  off
increased by $19.0  million  from the same period in 2000  primarily a result of
one  significant  recovery  of $14 million.  The percentage of net loans charged
off to average  loans  outstanding  for the period  decreased by 10 basis points
from the same period in 2000.  At September  30, 2001,  the allowance for credit
losses exceeded the annualized net loans charged off during the year, reflecting
management's belief, based on the foregoing analysis,  that there are additional
losses inherent in the portfolio.

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

<TABLE>
<CAPTION>


NONPERFORMING ASSETS

                                                                            SEPTEMBER 30,     DECEMBER 31,     SEPTEMBER 30,
(DOLLARS IN THOUSANDS)                                                          2000              2000             2001
-----------------------------------------------------------------------     -------------     ------------     -------------
<S>                                                                            <C>                <C>                 <C>

Commercial, financial and industrial...................................        $262,169           $385,263        $419,544
Construction...........................................................           3,967              3,967              --
Commercial mortgage....................................................          11,509             10,769          24,975
Foreign................................................................           5,354                 --              --
                                                                            -------------     ------------     -------------
   Total nonaccrual loans..............................................         282,999            399,999         444,519
Distressed loans held for sale.........................................          14,782              7,124           5,349
Foreclosed assets......................................................           2,014              1,181             378
                                                                            -------------     ------------     -------------
   Total nonperforming assets..........................................        $299,795           $408,304        $450,246
                                                                            =============     ============     =============

Allowance for credit losses............................................        $525,896           $613,902        $629,683
                                                                            =============     ============     =============


Nonaccrual loans to total loans........................................            1.08%              1.54%           1.74%
Allowance for credit losses to nonaccrual loans........................          185.83             153.48          141.65
Nonperforming assets to total loans, distressed loans held for sale and
   foreclosed assets...................................................            1.15               1.57            1.76
Nonperforming assets to total assets...................................            0.89               1.16            1.28

</TABLE>


         At September 30, 2001,  nonperforming assets totaled $450.2 million, an
increase of $150.5 million, or 50 percent, from a year earlier. The increase was
due to general deterioration in our loan portfolio.

         Nonaccrual  loans as a  percentage  of total loans were 1.74 percent at
September  30,  2001,   compared  with  1.08  percent  at  September  30,  2000.
Nonperforming  assets as a percentage of total loans,  distressed loans held for
sale, and foreclosed assets increased to 1.76 percent at September 30, 2001 from
1.15 percent at September 30, 2000.


                                       41


<PAGE>


LOANS 90 DAYS OR MORE PAST DUE AND STILL ACCRUING

<TABLE>
<CAPTION>

                                                                            SEPTEMBER 30,       DECEMBER 31,      SEPTEMBER 30,
(DOLLARS IN THOUSANDS)                                                          2000                2000              2001
-----------------------------------------------------------------------     -------------       ------------      -------------
<S>                                                                                <C>                <C>                <C>

Commercial, financial and industrial...................................           $ 5,758             $1,713            $ 5,993
Construction...........................................................               638                 --                 --
Mortgage:
   Residential.........................................................             2,835              2,699              5,063
   Commercial..........................................................                --                 --                710
                                                                                  -------             ------            -------
      Total mortgage...................................................             2,835              2,699              5,773
Consumer and other.....................................................             3,405              2,921              2,459
                                                                                  -------             ------            -------
   Total loans 90 days or more past due and still accruing.............           $12,636             $7,333            $14,225
                                                                                  =======             ======            =======

</TABLE>


LIQUIDITY

         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 Asset  and  Liability  Management  Policy  approved  by the Board of
Directors requires quarterly reviews of our liquidity by the Asset and Liability
Management Committee, which is composed of bank senior executives. Our liquidity
management  draws upon the  strengths  of our  extensive  retail and  commercial
market business franchise,  coupled with the ability to obtain funds for various
terms in a variety of domestic and  international  money  markets.  Liquidity is
managed  through the  funding and  investment  functions  of the Global  Markets
Group.

         Core deposits provide us with a sizable source of relatively stable and
low-cost funds. Our average core deposits,  which include demand deposits, money
market demand  accounts,  and savings and consumer time deposits,  combined with
average common shareholders'  equity,  funded 68 percent of average total assets
of $34.6  billion for the third quarter  ended  September 30, 2001.  Most of the
remaining  funding  was  provided  by  short-term  borrowings  in  the  form  of
negotiable  certificates of deposit,  foreign deposits,  federal funds purchased
and securities  sold under  repurchase  agreements,  commercial  paper and other
borrowings.

         Liquidity may also be provided by the sale or maturity of assets.  Such
assets  include  interest  bearing  deposits  in banks,  federal  funds sold and
securities  purchased under resale agreements,  and trading account  securities.
The aggregate of these assets  averaged $0.5 billion during the third quarter of
2001. Additional liquidity may be provided by securities available for sale that
amounted to $4.9 billion at September 30, 2001 and by loan maturities.


                                       42


<PAGE>


REGULATORY CAPITAL

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

<TABLE>
<CAPTION>

UNIONBANCAL CORPORATION

                                                                                                  MINIMUM        "WELL-CAPITALIZED"
                                    SEPTEMBER 30,       DECEMBER 31,       SEPTEMBER 30,         REGULATORY          REGULATORY
(DOLLARS IN THOUSANDS)                 2000                2000               2001               REQUIREMENT         REQUIREMENT
---------------------------------  ---------------     --------------     --------------        -------------     -----------------
<S>                                   <C>               <C>                 <C>
CAPITAL COMPONENTS
Tier 1 capital...................     $ 3,520,717       $ 3,471,289         $ 3,631,340
Tier 2 capital...................         613,777           620,102             605,605
                                      -----------       -----------         -----------
Total risk-based capital.........     $ 4,134,494       $ 4,091,391         $ 4,236,945
                                      ===========       ===========         ===========

Risk-weighted assets.............     $33,476,055       $33,900,404         $32,473,206
                                      ===========       ===========         ===========

Quarterly average assets.........     $33,637,908       $34,075,813         $34,572,908
                                      ===========       ===========         ===========
</TABLE>


<TABLE>
<CAPTION>

                                   AMOUNT     RATIO     AMOUNT    RATIO     AMOUNT    RATIO     AMOUNT    RATIO
                                   ------     -----     ------    -----     ------    -----     ------    -----
<S>                               <C>         <C>     <C>         <C>     <C>         <C>       <C>        <C>         <C>
CAPITAL RATIOS
Total capital (to
   risk-weighted assets)...       $4,134,494  12.35%  $4,091,391  12.07%  $4,236,945  13.05% >  $2,597,856 8.0%         na
                                                                                             -
Tier 1 capital (to
   risk-weighted assets)...        3,520,717  10.52    3,471,289  10.24    3,631,340  11.18  >   1,298,928 4.0          na
                                                                                             -
Leverage(1)................        3,520,717  10.47    3,471,289  10.19    3,631,340  10.50  >   1,382,916 4.0          na
                                                                                             -
__________________
<FN>
(1)      Tier 1 capital divided by quarterly average assets (excluding certain intangible assets).

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


<TABLE>
<CAPTION>

UNION BANK OF CALIFORNIA, N.A.


                                                                                                  MINIMUM        "WELL-CAPITALIZED"
                                    SEPTEMBER 30,       DECEMBER 31,       SEPTEMBER 30,         REGULATORY          REGULATORY
(DOLLARS IN THOUSANDS)                  2000               2000             2001                 REQUIREMENT         REQUIREMENT
----------------------------------  -------------       ------------       -------------         -----------      -----------------
<S>                                   <C>               <C>                 <C>
CAPITAL COMPONENTS
Tier 1 capital....................    $ 3,295,828       $ 3,157,516         $ 3,275,643
Tier 2 capital....................        506,616         513,144               495,165

Total risk-based capital..........    $ 3,802,444       $ 3,670,660         $ 3,770,808



Risk-weighted assets..............    $32,900,514       $33,341,752         $31,887,207



Quarterly average assets..........    $33,942,940       $34,173,719         $34,132,248

</TABLE>


<TABLE>
<CAPTION>

                                    AMOUNT    RATIO     AMOUNT    RATIO     AMOUNT    RATIO      AMOUNT    RATIO   AMOUNT    RATIO
                                    ------    -----     ------    -----     ------    -----      ------    -----   ------    -----
<S>                               <C>         <C>     <C>         <C>     <C>         <C>      <C>         <C>    <C>         <C>
CAPITAL RATIOS
Total capital (to
   risk-weighted assets)..        $3,802,444  11.56%  $3,670,660  11.01%  $3,770,808  11.83% > $2,550,977  8.0% > $3,188,721  10.0%
                                                                                             -                  -
Tier 1 capital (to
   risk-weighted assets)..         3,295,828  10.02    3,157,516   9.47    3,275,643  10.27  >  1,275,488  4.0  >  1,913,232   6.0
                                                                                             -                  -
Leverage(1)...............         3,295,828   9.71    3,157,516   9.24    3,275,643   9.60  >  1,365,290  4.0  >  1,706,612   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  issued by  federal  banking  agencies,  including  minimum  capital
requirements.  We and Union Bank of  California,  N.A.  are required to maintain
minimum ratios of total and Tier 1 capital to risk-weighted assets and of Tier 1
capital to quarterly average assets (the leverage ratio).

         Compared with December 31, 2000, our Tier 1 risk-based capital ratio at
September  30,  2001  increased  94 basis  points  to 11.18  percent,  our total
risk-based capital ratio increased 98 basis points to


                                       43


<PAGE>


13.05  percent,  and our  leverage  ratio  increased  31 basis  points  to 10.50
percent.  The increases in the capital  ratios were  primarily  attributable  to
higher common equity mainly related to higher net income and a lower  risk-based
asset  balance  mainly due to lower  commercial  loan balances  outstanding  and
unused commitments in the third quarter of 2001.

         As of September  30, 2001,  management  believes the capital  ratios of
Union  Bank  of  California,   N.A.  met  all  regulatory   requirements   of  a
"well-capitalized" institution.

CERTAIN BUSINESS RISKS FACTORS



 ADVERSE CALIFORNIA ECONOMIC CONDITIONS COULD ADVERSELY AFFECT OUR BUSINESS

         A  substantial  majority of our assets and  deposits  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.  In the early  1990's,  the  California  economy
experienced  an economic  recession  that  resulted in increases in the level of
delinquencies  and  losses  for  us and  many  of the  state's  other  financial
institutions.  Economic conditions in California are currently in a downturn and
the  outlook  for  recovery  is subject to various  uncertainties  at this time,
including the long-term  impact of the California  energy crisis and the decline
in the  technology  sector.  If economic  conditions in  California  continue to
decline, we expect that our level of problem assets could increase accordingly.

ADVERSE ECONOMIC FACTORS AFFECTING CERTAIN INDUSTRIES COULD ADVERSELY AFFECT OUR
BUSINESS

         We are  subject  to certain  industry-specific  economic  factors.  For
example,  a portion of our total  loan  portfolio  is  related  to real  estate.
Accordingly,  a downturn in the real estate industry in California could have an
adverse  effect  on our  operations.  Similarly,  a portion  of our  total  loan
portfolio  is  to  borrowers  in  the  agricultural  industry.  Adverse  weather
conditions,  combined  with low  commodity  prices,  may  adversely  affect  the
agricultural industry and, consequently,  may impact our business negatively. In
addition,  auto leases comprise a portion of our total loan portfolio. We ceased
originating auto leases in April 2001; however,  continued  deterioration in the
used car market may result in  additional  losses on the valuation of auto lease
residuals  on our existing  auto leases.  We provide  loans to  businesses  in a
number   of  other   industries   that  may  be   particularly   vulnerable   to
industry-specific economic factors, including the communications/media industry,
the retailing industry, and the technology industry. Industry-specific risks are
beyond  our  control  and  could  adversely   affect  our  portfolio  of  loans,
potentially resulting in an increase in nonperforming loans or charge-offs.

         THE TRAGIC EVENTS OF SEPTEMBER 11 HAVE RESULTED IN INCREASED
UNCERTAINTY REGARDING THE OUTLOOK FOR ECONOMIC CONDITIONS.

         The  terrorist  attacks on the World Trade  Center and the  Pentagon on
September 11, 2001 have resulted in increased uncertainty regarding the economic
outlook.  Past experience suggests that shocks to American society of far lesser
severity have resulted in a temporary  loss in consumer and business  confidence
and a reduction in the rate of economic growth. With the U.S. economy already on
the edge of recession before the attacks, a downturn in California's  economy is
now a distinct  possibility.  It is not  possible  at this time to  project  the
economic impact of these events.  However,  any further  deterioration in either
the  U.S.  or the  California  economy  would  adversely  affect  our  financial
condition and results of operations.

RISKS  ASSOCIATED WITH THE CALIFORNIA  ENERGY CRISIS COULD ADVERSELY  AFFECT OUR
BUSINESS

         Due to problems  associated  with the  deregulation  of the  electrical
power industry in  California,  California  utilities and other energy  industry
participants  have  experienced  difficulties  with  the  supply  and  price  of
electricity  and natural  gas. For example,  earlier this year,  two  California
utilities publicly  announced that their financial  situation was grave and that
they had  defaulted  on  certain  payment  obligations.  The  California  energy
situation  continues to be fluid and subject to many  uncertainties and a number
of lawsuits and regulatory  proceedings have been commenced  concerning  various
aspects of the


                                       44


<PAGE>


current energy situation.  As a lender to segments of the utility  industry,  we
face  the  risk  that  energy-industry  participants  could  sustain  continuing
defaults on payments or seek bankruptcy protection.

         In addition, although the situation has stabilized recently,  customers
of the  utilities  have been faced  this year with  increased  gas and  electric
prices,  power shortages and, in some cases,  rolling  blackouts.  The long-term
impact of the energy crisis in California on our markets and our business cannot
be  predicted  but could  result in an  economic  slow-down.  This could have an
adverse  effect on the demand for new loans,  the ability of  borrowers to repay
outstanding loans, the value of real estate and other collateral  securing loans
and, as a result, on our financial condition and results of operations.

 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,  a decrease in interest  rates could
result in an  acceleration  in the  prepayment  of loans.  An increase in market
interest  rates could also  adversely  affect the  ability of our  floating-rate
borrowers to meet their higher payment obligations.  If this occurred,  it could
cause an increase in nonperforming assets and charge-offs, which could adversely
affect our business.

 FLUCTUATIONS IN INTEREST RATES COULD ADVERSELY AFFECT OUR MARGIN SPREAD

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

SHAREHOLDER  VOTES ARE CONTROLLED BY THE BANK OF  TOKYO-MITSUBISHI,  LTD.;  YOUR
INTERESTS MAY NOT BE THE SAME AS THE BANK OF TOKYO-MITSUBISHI'S INTERESTS

         The Bank of  Tokyo-Mitsubishi,  Ltd.,  a  wholly  owned  subsidiary  of
Mitsubishi  Tokyo  Financial  Group,  Inc.,  owns a majority  (67  percent as of
September 30, 2001) 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  determinations such as: approval of
mergers or other business combinations; sales of all or substantially all of our
assets;  any matters  submitted to a vote of our  shareholders;  issuance of any
additional  common stock or other equity  securities;  incurrence  of debt other
than in the ordinary  course of business;  the selection and tenure of our Chief
Executive  Officer;  payment of dividends  with respect to common stock or other
equity  securities;  and  matters  that  might  be  favorable  to  The  Bank  of
Tokyo-Mitsubishi, Ltd.

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

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

         Although  we  fund  our  operations   independently   of  The  Bank  of
Tokyo-Mitsubishi,  Ltd.  and believe our  business  is not  necessarily  closely
related to The Bank of Tokyo-Mitsubishi, Ltd.'s business or outlook, The Bank of
Tokyo-Mitsubishi,   Ltd.'s  credit  ratings  may  affect  our  credit   ratings.
Deterioration  in  The  Bank  of  Tokyo-Mitsubishi,  Ltd.'s  credit  ratings  or
financial condition could result in an increase in our


                                       45



<PAGE>


borrowing  costs and could  impair our access to the public and private  capital
markets.  The Bank of  Tokyo-Mitsubishi,  Ltd.  is also  subject  to  regulatory
oversight  and review.  Our business  operations  and  expansion  plans could be
negatively  affected by regulatory  concerns  related to the Japanese  financial
system and The Bank of Tokyo-Mitsubishi, Ltd.

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

         As part of The Bank of Tokyo-Mitsubishi,  Ltd.'s normal risk management
processes,  The Bank of  Tokyo-Mitsubishi,  Ltd. manages global credit exposures
and  concentrations on an aggregate basis,  including  UnionBanCal  Corporation.
Therefore,  at  certain  levels,  our  ability to approve  certain  credits  and
categories   of   customers   is   subject  to   concurrence   by  The  Bank  of
Tokyo-Mitsubishi,  Ltd. We may wish to extend credit to the same customer 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  credit
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 the  United  States  banking
industry.

SUBSTANTIAL  COMPETITION IN THE CALIFORNIA BANKING MARKET COULD ADVERSELY AFFECT
US

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

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
liquidates,   that   subsidiary's   creditors   will  be   entitled  to  receive
distributions from the assets of that subsidiary to satisfy their claims against
it  before  we, as a holder of an equity  interest  in the  subsidiary,  will be
entitled to receive any of the assets of the subsidiary.

ADVERSE EFFECTS OF BANKING  REGULATIONS OR CHANGES IN BANKING  REGULATIONS COULD
ADVERSELY AFFECT US

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


                                       46



<PAGE>


Governors of the Federal Reserve  System,  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.

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

         Although The Bank of Tokyo-Mitsubishi, Ltd. has announced its intention
to maintain its majority ownership in us, 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 them to
sell shares more easily. In addition,  The Bank of Tokyo-Mitsubishi,  Ltd. could
sell shares of our common stock without registration  pursuant to Rule 144 under
the Securities Act. 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 shareholder.

 WE MAY NOT BE ABLE TO SUCCESSFULLY IMPLEMENT OUR OPERATING STRATEGIES

         In connection  with our  strategic  plan  established  in 2000, we have
developed long-term financial  performance goals, which we expect to result from
successful implementation of our operating strategies. We cannot assure you that
we will be successful in achieving  these  long-term goals or that our operating
strategies will be successful.  Achieving success in these areas is dependent on
a number of factors,  many of which are beyond our direct control.  Factors that
may adversely affect our ability to attain our long-term  financial  performance
goals include:

         o   deterioration of our asset quality,

         o   our inability to control noninterest expenses,

         o   our inability to increase noninterest income,

         o   our inability to decrease reliance on asset revenues,

         o   our ability to sustain loan growth,

         o   regulatory   and   other   impediments   associated   with   making
             acquisitions,

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

         o   decreases in net interest margins,

         o   increases in competition,

         o   adverse regulatory or legislative developments, and

         o   unexpected increases in costs related to potential acquisitions.

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

         We may  acquire  or  invest in  companies,  technologies,  services  or
products that complement our business.  In addition, we continue to evaluate the
performance  of all of our businesses and business lines and may sell a business
or business lines. Any acquisitions, divestitures or restructuring may result in
the potentially dilutive issuance of equity securities,  significant write-offs,
including  those  related to goodwill  and other  intangible  assets  and/or the
incurrence  of debt,  any of which could have a material  adverse  effect on our
business,   financial   condition  and  results  of  operations.   Acquisitions,
divestitures or restructuring


                                       47



<PAGE>


could  involve  numerous   additional   risks  including   difficulties  in  the
assimilation or separation of operations,  services, products and personnel, the
diversion of management's attention from other business concerns, the disruption
of our  business,  and the  potential  loss of key  employees.  There  can be no
assurance  that  we  would  be  successful  in  overcoming  these  or any  other
significant risks encountered.

ITEM 3. MARKET RISK.

         Our exposure to market risk was mitigated in the volatile interest rate
environment  in the first nine  months of 2001 due to the  effectiveness  of our
asset/liability  management.  A complete explanation  concerning our market risk
exposure  is   incorporated  by  reference  from  the  text  under  the  caption
"Quantitative  and Qualitative  Disclosures  About Market Risk" in the Form 10-K
for the year ended December 31, 2000.










































                                       48


<PAGE>


                           PART II. OTHER INFORMATION


ITEM 4.  OTHER INFORMATION


         ANNUAL MEETING OF SHAREHOLDERS: The Annual Meeting of Shareholders will
be held on Wednesday, April 24, 2002, at 9:30 a.m upon the approval of the Board
of Directors at the December 2001 meeting.  Shareholders who expect to present a
proposal at the 2002  Annual  Meeting of  Shareholders  for  publication  in the
Company's  proxy  statement  and action on the proxy form or otherwise  for such
meeting must submit  their  proposal by December 2, 2001.  The proposal  must be
mailed to the Corporate  Secretary of the Company at 400 California Street, Mail
Code  1-001-16,  San  Francisco,  CA 94104.  Without such notice,  proxy holders
appointed  by the Board of Directors of the Company will be entitled to exercise
their  discretionary  voting authority when the proposal is raised at the annual
meeting, without any discussion of the proposal in the proxy statement.

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


(a)      Exhibits:


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

  3.1    Restated Articles of Incorporation of the Registrant, as amended(1)">
  3.2    By-laws of the Registrant, as amended January 27, 1999(2)">
 10.1    Management Stock Plan. (As restated effective June 1, 1997)*(3)
 10.2    Union Bank of California Deferred Compensation Plan. (January 1, 1997,
         Restatement, as amended November 21, 1996)*(4)">
 10.3    Union Bank of California Senior Management Bonus Plan. (Effective
         January 1, 2001)*(5)
 10.4    Richard C. Hartnack Employment Agreement. (Effective January 1, 1998)*
         (6)
 10.5    Robert M. Walker Employment Agreement. (Effective January 1, 1998)*(6)
 10.6    Union Bank of California Supplemental Executive Retirement Plan.
         (Effective January 1, 1988) (Amended and restated as of January 1,
         1997)*(3)
 10.7    Union Bank Financial Services Reimbursement Program. (Effective
         January 1, 1996)*(7)
 10.9    1997 Performance Share Plan, as amended.(Effective January 1, 1997)*(5)
10.10    Service Agreement Between Union Bank of California and The Bank of
         Tokyo-Mitsubishi Ltd. (Effective October 1, 1997)*(3)
10.11    Management Stock Plan. (As restated effective January 1, 2000)*(8)
10.12    Union Bank of Califorinia, N.A. Supplemental Retirement Plan for Policy
         Making Officers. (Effective November 1, 1999)(9)

__________________

(1)      Incorporated by reference to Form 10-K for the year ended December 31,
         1998.

(2)      Incorporated by reference to Form 10-Q for the quarter ended March 31,
         1999.

(3)      Incorporated by reference to Form 10-K for the year ended December 31,
         1997.

(4)      Incorporated by reference to Form 10-K for the year ended December 31,
         1996.

(5)      Incorporated by reference to Form DEF-14A dated March 28, 2001.

(6)      Incorporated by reference to Form 10-Q for the quarter ended September
         30, 1998.

(7)      Incorporated by reference to Form 8-K dated April 1, 1996.

(8)      Incorporated by reference to form 10-Q for the quarter ended June 30,
         1999.

(9)      Incorporated by reference to Form 10-Q for the quarter ended June 30,
         2000.

*        Management contract or compensatory plan, contract or arrangement.

(b)      Reports on Form 8-K:

None


                                       49


<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)



                            By:  /s/ DAVID I. MATSON
                                 -----------------------------------------------
                                     David I. Matson
                                     EXECUTIVE VICE PRESIDENT AND
                                     CHIEF FINANCIAL OFFICER


                            By:  /s/ DAVID A. ANDERSON
                                 -----------------------------------------------
                                     David A. Anderson
                                     SENIOR VICE PRESIDENT AND CONTROLLER


                            Dated: November 13, 2001








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