# BANK ONE CORPORATION INDEX TO FINANCIAL
REVIEW

|   | 
|-- | 
|1  | 
|2  | 
|2  | 
|6  | 
|6  | 
|27 | 
|27 | 
|28 | 
|28 | 
|30 | 
|34 | 
|37 | 
|40 | 
|41 | 
|44 | 
|46 | 
|47 | 
|51 | 
|62 | 
|65 | 
|66 | 
|67 | 

---

FIVE QUARTER SUMMARY OF
SELECTED FINANCIAL INFORMATION Bank One Corporation
and Subsidiaries

|                                            | Three Months Ended
|------------------------------------------- | ------------------
|
|INCOME STATEMENT DATA:                      |                   
|Total revenue, net of interest expense      |                   
|Net interest income                         |                   
|Net interest income-                        |                   
|fully taxable-equivalent basis ("FTE") (1)  |                   
|Noninterest income                          |                   
|Provision for credit losses                 |                   
|Noninterest expense                         |                   
|Net income                                  |                   
|PER COMMON SHARE DATA:                      |                   
|Net income:                                 |                   
|Basic                                       |                   
|Diluted                                     |                   
|Cash dividends declared                     |                   
|Book value                                  |                   
|BALANCE SHEET DATA - ENDING BALANCES:       |                   
|Loans                                       |                   
|Total assets                                |                   
|Deposits                                    |                   
|Long-term debt (2)                          |                   
|Common stockholders' equity                 |                   
|Total stockholders' equity                  |                   
|CREDIT QUALITY RATIOS:                      |                   
|Annualized net charge-offs to average loans |                   
|Allowance to period end loans               |                   
|Nonperforming assets to related assets (3)  |                   
|FINANCIAL PERFORMANCE:                      |                   
|Return on average assets                    |                   
|Return on average common equity             |                   
|Net interest margin                         |                   
|Efficiency ratio                            |                   
|CAPITAL RATIOS:                             |                   
|Risk-based capital:                         |                   
|Tier 1                                      |                   
|Total                                       |                   
|Leverage                                    |                   
|COMMON STOCK DATA:                          |                   
|Average shares outstanding:                 |                   
|Basic                                       |                   
|Diluted                                     |                   
|Stock price, quarter-end                    |                   
|Headcount                                   |                   
|                                           

| | (1) | Net interest income-FTE includes tax equivalent adjustments of $39 million, $37
               million, $36 million, $38 million and $36 million for the quarters ended June
               30, 2003, March 31, 2003, December 31, 2002, September 30, 2002 and June 30,
               2002, respectively.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | Includes trust preferred capital securities.
| | --- | --------------------------------------------

| | (3) | Related assets consist of loans outstanding, including loans held for sale, and
               other real estate owned.
| | --- | -----------------------------------------------------------------------------------------------------------------------

1

---

APPLICATION OF CRITICAL
ACCOUNTING POLICIES

Generally accepted accounting
principles are complex and require management to apply significant judgments to various
accounting, reporting and disclosure matters. Management of Bank One Corporation and its
subsidiaries (the Corporation) must use assumptions and estimates to apply
these principles where actual measurement is not possible or practical. For a complete
discussion of the Corporations significant accounting policies, see Notes to
the Consolidated Financial Statements in the Corporations 2002 Annual Report
on pages 84-108. Certain policies are considered critical because they are highly
dependent upon subjective or complex judgments, assumptions and estimates. Changes in such
estimates may have a significant impact on the financial statements. Management has
reviewed the application of these policies with the Audit and Risk Management Committee of
the Corporations Board of Directors. For a discussion of applying critical
accounting policies, see Application of Critical Accounting Policies beginning
on page 35 in the Corporations 2002 Annual Report.

SUMMARY OF RESULTS (All comparisons are to the same
period in the prior year unless otherwise specified.)

Net income was $856 million, or $0.75
per diluted share. This compares to net income of $803 million, or $0.68 per diluted
share, excluding the $40 million after-tax benefit from a restructuring charge reversal in
the second quarter of 2002. Including this benefit, the prior years net income was
$843 million, or $0.71 per diluted share. For the first half of 2003, net income totaled
$1.7 billion, or $1.46 per diluted share. This compares to net income of $1.6 billion, or
$1.35 per diluted share, excluding the $40 million after-tax benefit from a restructuring
charge reversal in the second quarter of 2002. Including this benefit, the prior
years net income for the first half of the year was $1.6 billion, or $1.38 per
diluted share.

# Net Interest Income

Net interest income represents the
spread on interest earning assets over interest bearing liabilities, as well as loan fees,
cash interest collections on problem loans, dividend income, interest reversals, and
income or expense on derivatives used to manage interest rate risk. Net interest income
was $2.0 billion, a decrease of $61 million, or 3%. Net interest margin decreased to
3.38% from 3.69%. For the first six months of 2003, net interest income was $4.0 billion,
a decrease of $269 million, or 6%. Net interest margin for the same period decreased to
3.42% from 3.80%. For both the second quarter and the first half of 2003, approximately
half of the decline in net interest income and margin resulted from actions taken in 2002
to position the Corporation more defensively against the possibility of rising interest
rates. In 2002, the Corporation extended the duration of liabilities and repositioned the
treasury investment portfolio, which reduced net interest income in 2003 due to the lower
rate environment. Also contributing to the decreases were intentional reductions during
2002 in the Commercial Banking loan portfolio and throughout the period in certain Retail
loan portfolios, with a modest impact due to yield compression in Card Services. See Note
7 for further details of the components of net interest income.

# Noninterest Income

Noninterest income of $2.1 billion
decreased $111 million, and as a percentage of total revenue decreased to 51.8% from
52.3%. For the first half of 2003, noninterest income of $4.1 billion decreased $95
million. For both periods, these decreases were primarily due to losses on the credit
derivatives hedge portfolio and lower income derived from securitized loans. Partially
offsetting the losses and lower income were net investment securities gains. The
components of noninterest income for the periods indicated were:

|                                         | Three Months Ended June 30 | Six Months Ended June 30
|---------------------------------------- | -------------------------- | ------------------------
|
|
|Banking fees and commissions             |                            |                         
|Credit card revenue                      |                            |                         
|Service charges on deposits              |                            |                         
|Fiduciary and investment management fees |                            |                         
|Investment securities gains              |                            |                         
|Trading gains (losses)                   |                            |                         
|Other income                             |                            |                         
|                                        
|Total noninterest income                 |                            |                         
|Noninterest income to total revenue      |                            |                         
|                                        

2

---

Quarterly Results

Banking fees and commissions of $458
million decreased $35 million, or 7%. Lower premiums from credit insurance products, lower
fees resulting from the intentional reduction of non-branded ATM machines and the
elimination of the teller service fee were the primary drivers of this decrease. Partially
offsetting the decrease was an increase in fixed income and asset-backed origination fees.

Credit
card revenue of $911 million decreased $51 million, or 5%, primarily driven by lower
yields earned on securitized loans, partially offset by higher interchange fees from
increased card usage and increased securitization activity.

Service
charges on deposits of $413 million increased $37 million, or 10%. This increase resulted
from higher Retail deposit service charges and higher global treasury services revenue.

Net
securities gains from treasury activities and the investment portfolios were $152 million,
compared to net securities gains of $96 million. The prior year included the $261 million
gain on the sale of the GE Monogram joint venture. Valuation adjustments included in each
periods net securities gains were primarily a result of changes in the value of the
publicly traded equity market, the interest rate environment and economic conditions.

In
the second quarter, trading produced losses of $76 million, a decrease of $150 million.
This decrease resulted from the fair value decline in credit derivatives used to hedge the
commercial loan portfolio and limit exposures to specific credits, partially offset by
increased derivatives trading revenue.

Other
income increased by $34 million, or 69%. The primary driver of this increase was gains on
sales of loans totaling $14 million in the current quarter compared to losses of $22
million in the year ago quarter.

Year-to-Date Results

Banking fees and commissions of $898
million decreased $53 million, or 6%. This decrease was the result of lower premiums from
credit insurance products and lower fees from the intentional reduction of non-branded ATM
machines, partially offset by an increase in fixed income and asset-backed origination
fees and higher syndication fees.

Credit
card revenue of $1.8 billion decreased $109 million, or 6%. This decrease was primarily
driven by lower income earned on securitized loans, modestly offset by higher interchange
fees from increased card usage volume.

Service
charges on deposits of $796 million increased $27 million, or 4%. This increase stemmed
from higher Retail deposit service charges.

Net
securities gains from treasury activities and the investment portfolios were $221 million,
compared to net securities gains of $78 million. The prior year included the $261 million
gain on the sale of the GE Monogram joint venture. Valuation adjustments included in each
periods net securities gains were primarily a result of changes in the value of the
publicly traded equity market, the interest rate environment and economic conditions.

Trading
losses of $72 million decreased $163 million. This decrease was primarily the result of
losses on credit derivatives used to hedge the commercial loan portfolio and limit
exposures to specific credits, partially offset by greater derivatives and foreign
exchange trading revenue.

Other
income of $135 million increased $65 million, or 93%, primarily the result of an increase
in new securitization deals and gains associated with the sale of commercial loans and
other assets.

3

---

# Noninterest Expense

Total noninterest expense of $2.4
billion decreased $19 million, including a $63 million benefit from a restructuring
charge reversal in the year ago quarter. Excluding this benefit, noninterest expense
decreased $82 million, or 3%. The components of noninterest expense for the periods
indicated were:

|                                          | Three Months Ended June 30 | Six Months Ended June 30
|----------------------------------------- | -------------------------- | ------------------------
|
|
|Salaries and employee benefits:           |                            |                         
|Salaries                                  |                            |                         
|Employee benefits                         |                            |                         
|                                         
|Total salaries and employee benefits      |                            |                         
|Occupancy                                 |                            |                         
|Equipment                                 |                            |                         
|Outside service fees and processing       |                            |                         
|Marketing and development                 |                            |                         
|Telecommunication                         |                            |                         
|Other intangible amortization             |                            |                         
|Other expense                             |                            |                         
|                                         
|Total noninterest expense before          |                            |                         
|restructuring-related charges (reversals) |                            |                         
|Restructuring-related charges (reversals) |                            |                         
|                                         
|Total noninterest expense                 |                            |                         
|                                         
|Headcount                                 |                            |                         
|Efficiency ratio                          |                            |                         
|                                         

Quarterly Results

Salaries and employee benefits
increased $123 million, or 11%. This increase was due to higher base and incentive
compensation, as well as higher benefit expenses, partially offset by a 2% reduction in
headcount.

Equipment
expense increased $19 million, or 19%, primarily due to increased depreciation expense on
fixed assets acquired in the Corporations systems conversion efforts.

Outside
service fees and processing expense decreased $83 million, or 22%. The prior year period
included termination and renegotiation fees for certain vendor contracts and various
servicing and contract programming charges for the Corporations systems conversion
efforts.

Marketing
and development expense decreased $50 million, or 19%, primarily due to decreased
advertising expenditures for Card Services.

Telecommunications
expense decreased $79 million, or 59%, due to the absence of servicing expenses resulting
from terminating and renegotiating certain vendor contracts.

Other
expense decreased $11 million, primarily related to lower operating and fraud expenses.
Other expense includes freight and postage expense of $61 million and $63 million for 2003
and 2002, respectively.

Year-to-Date Results

Salaries and employee benefits
increased $210 million, or 10%, due to higher base and incentive compensation and benefit
expenses, partially offset by a reduction in headcount. The expense related to the fair
value method of accounting for stock option and stock purchase plans for the six months
ended 2003 and 2002 was $29 million and $12 million, respectively. The Corporation adopted
the fair value recognition provisions of SFAS No. 123, Accounting for Stock-Based
Compensation, in 2002.

Equipment
expense increased $27 million, or 13%, primarily due to higher depreciation expense on
fixed assets acquired in the Corporations systems conversion efforts.

Outside
service fees and processing expense decreased $106 million, or 16%, as the Corporation
continued to experience operational efficiencies resulting from renegotiated vendor
contracts and the Corporations systems conversion efforts.

4

---

Marketing
and development expense decreased $95 million, or 18%, primarily due to lower advertising
expenditures related to Card Services.

Telecommunications
expense decreased $132 million, or 56%, as a result of cost savings incurred through
terminated and renegotiated vendor contracts.

Other
expense decreased $33 million, or 5%, despite continued reinvestment in the
Corporations infrastructure. This was a result of lower operating and fraud
expenses. Other expense includes freight and postage expense of $123 million and $131
million for 2003 and 2002, respectively.

# Provision for Credit
Losses

Provision for credit losses was $461
million for the second quarter and $957 million for the first six months of 2003, compared
to $607 million and $1.3 billion, respectively, for 2002. These decreases were mainly a
result of improving credit quality. During the quarter, Commercial Banking also
experienced a continued reduction in the size of its loan portfolio. This, along with
improved credit quality, led to the decision to reduce Commercial Bankings allowance
for credit losses by $95 million. This decrease in the allowance for credit losses was
partially offset by an increase of $85 million in the Corporate line of business related
to the change in the overall risk profile of the non-core portfolios. These portfolios are
discussed on pages 6 and 23-26.

# Applicable Income Taxes

The Corporations income before
income taxes, as well as applicable income tax expense and effective tax rate for each of
the periods indicated were:

|                           | Three Months Ended June 30 | Six Months Ended June 30
|-------------------------- | -------------------------- | ------------------------
|
|Income before income taxes |                            | $1,222                  
|Applicable income taxes    |                            | 366                     
|Effective tax rate         |                            | 30                      
|                          

Applicable
income tax expense for all periods included the benefit from tax-exempt income,
tax-advantaged investments and general business tax credits, partially offset by the
effect of nondeductible expenses.

5

---

BUSINESS SEGMENT RESULTS

The Corporation is managed on a line
of business basis. The business segments financial results presented reflect the
current organization of the Corporation. For a detailed discussion of the various business
activities of the Corporations business segments, see pages 38-51 of the
Corporations 2002 Annual Report.



The
following table summarizes net income (loss) by line of business for the periods
indicated:

|                      | Three Months Ended June 30 | Six Months Ended June 30
|--------------------- | -------------------------- | ------------------------
|
|Retail                |                            | $ 373                   
|Commercial Banking    |                            | 249                     
|Card Services         |                            | 279                     
|Investment Management |                            | 85                      
|Corporate             |                            | (130                    
|                     
|Net income            |                            | $ 856                   
|                     

BUSINESS SEGMENT RESULTS
AND OTHER DATA

The information provided in each of
the line of business tables is based on management information systems, assumptions and
methodologies that are under continual review by management. Information provided
beginning with the caption entitled Financial Performance is included herein
for analytical purposes only.

In
the second quarter of 2003, the Corporation ceased origination of wholesale first mortgage
and brokered home equity loans to focus on direct lending. In order to more clearly report
the results of the core Retail businesses separate from the non-core businesses, the
following portfolios were transferred to the Corporate line of business:

|(In millions)                       | June 30
2003
|----------------------------------- | ------------
|Brokered home equity:               |             
|Previously reported as discontinued |             
|Remaining portfolio                 |             
|Auto lease (and related portfolios) |             
|                                   
|Total transferred portfolios        |             
|                                   

The
Corporation is currently evaluating its alternatives with respect to these portfolios. All
prior period data for the Retail and Corporate lines of business has been adjusted to
reflect the transfer of these portfolios. See page 26 for a supplemental table of the
transferred portfolios included in the Corporate line of business.

6

---

RetailRetail provides a broad range of
financial products and services, including deposits, investments, loans, insurance, and
online banking to consumers and small business customers.

|                                          | Three Months Ended June 30 | Six Months Ended June 30
|----------------------------------------- | -------------------------- | ------------------------
|
|
|INCOME STATEMENT DATA:                    |                            |                         
|Net interest income-FTE (2) (3)           |                            |                         
|Banking fees and commissions (4)          |                            |                         
|Credit card revenue (5)                   |                            |                         
|Service charges on deposits (6)           |                            |                         
|Other income                              |                            |                         
|                                         
|Total noninterest income                  |                            |                         
|                                         
|Total revenue, net of interest expense    |                            |                         
|Provision for credit losses               |                            |                         
|Salaries and employee benefits            |                            |                         
|Other expense                             |                            |                         
|                                         
|Total noninterest expense before          |                            |                         
|restructuring-related charges (reversals) |                            |                         
|Restructuring-related charges (reversals) |                            |                         
|                                         
|Total noninterest expense                 |                            |                         
|                                         
|Income before income taxes                |                            |                         
|Applicable income taxes                   |                            |                         
|                                         
|Net income (7)                            |                            |                         
|                                         
|FINANCIAL PERFORMANCE:                    |                            |                         
|Return on average common equity           |                            |                         
|Efficiency ratio                          |                            |                         
|Headcount                                 |                            |                         
|                                         
|ENDING BALANCES:                          |                            |                         
|Small business commercial                 |                            |                         
|Home equity                               |                            |                         
|Vehicle                                   |                            |                         
|Other personal                            |                            |                         
|                                         
|Total loans (8)                           |                            |                         
|Assets                                    |                            |                         
|Demand deposits                           |                            |                         
|Savings                                   |                            |                         
|                                         
|Core deposits                             |                            |                         
|Time                                      |                            |                         
|                                         
|Total deposits                            |                            |                         
|Equity                                    |                            |                         
|                                         
|AVERAGE BALANCES:                         |                            |                         
|Small business commercial                 |                            |                         
|Home equity                               |                            |                         
|Vehicle                                   |                            |                         
|Other personal loans                      |                            |                         
|                                         
|Total loans                               |                            |                         
|Assets                                    |                            |                         
|Demand deposits                           |                            |                         
|Savings                                   |                            |                         
|                                         
|Core deposits                             |                            |                         
|Time                                      |                            |                         
|                                         
|Total deposits                            |                            |                         
|Equity                                    |                            |                         
|                                         

7

---

# Retail  continued

|                                                           | Three Months Ended June 30 | Six Months Ended June 30
|---------------------------------------------------------- | -------------------------- | ------------------------
|
|
|CREDIT QUALITY                                             |                            |                         
|Net charge-offs:                                           |                            |                         
|Small business commercial                                  |                            |                         
|Home equity                                                |                            |                         
|Vehicle                                                    |                            |                         
|Other personal loans                                       |                            |                         
|                                                          
|Total net charge-offs                                      |                            |                         
|                                                          
|Annualized net charge-off ratios:                          |                            |                         
|Small business commercial                                  |                            |                         
|Home equity                                                |                            |                         
|Vehicle                                                    |                            |                         
|Other personal loans                                       |                            |                         
|Total net charge-offs                                      |                            |                         
|                                                          
|Nonperforming assets:                                      |                            |                         
|Commercial                                                 |                            |                         
|Consumer (9)                                               |                            |                         
|                                                          
|Total nonperforming loans (9) (10)                         |                            |                         
|Other, including other real estate owned ("OREO")          |                            |                         
|                                                          
|Total nonperforming assets                                 |                            |                         
|Allowance for credit losses                                |                            |                         
|Allowance to period end loans (8)                          |                            |                         
|Allowance to nonperforming loans (9) (10)                  |                            |                         
|Nonperforming assets to related assets (11)                |                            |                         
|                                                          
|DISTRIBUTION:                                              |                            |                         
|Number of:                                                 |                            |                         
|Banking centers                                            |                            |                         
|ATMs                                                       |                            |                         
|Relationship bankers                                       |                            |                         
|On-line customers (in thousands)                           |                            |                         
|Personal demand accounts (in thousands)                    |                            |                         
|Business demand accounts (in thousands)                    |                            |                         
|Debit cards issued (in thousands)                          |                            |                         
|                                                          
|RETAIL BROKERAGE:                                          |                            |                         
|Mutual fund sales                                          |                            |                         
|Annuity sales                                              |                            |                         
|                                                          
|Total investment sales volume                              |                            |                         
|Market value customer assets - end of period (in billions) |                            |                         
|Number of customers - end of period (in thousands)         |                            |                         
|Number of dedicated investment sales representatives       |                            |                         
|                                                          

N/MNot meaningful.

| | (1) | Prior period data has been adjusted for the transfer of the non-core portfolios
               from the Retail line of business to the Corporate line of business.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | Net interest income is presented rather than gross interest income and gross
               interest expense because the Corporation relies primarily on net interest income
               to assess the performance of the segment and make resource allocations.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (3) | Net interest income-FTE includes tax equivalent adjustments of $6 million and $5
               million for the three months ended June 30, 2003 and 2002, respectively. For the
               six months ended June 30, 2003 and 2002, tax equivalent adjustments were $11
               million and $10 million, respectively.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (4) | Banking fees and commissions include insurance fees, documentary fees,
               commitment fees, annuity and mutual fund commissions, leasing fees, safe deposit
               fees, official check fees, ATM interchange and miscellaneous other fee revenue.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (5) | Credit card revenue includes credit card fees in both the Card Services and
               Commercial lines of business, debit card fees, merchant fees and interchange
               fees.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (6) | Service charges on deposits include deficient balance fees, non-sufficient
               funds/overdraft fees and other service related fees.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------

| | (7) | Net income before restructuring-related reversals, net of $7 million tax, was
               $360 million and $724 million for the three and six months ended June 30, 2002,
               respectively.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (8) | Loans include loans held for sale of $2,067 million and $1,572 million at June
               30, 2003 and 2002, respectively. These amounts are not included in allowance for
               credit losses coverage statistics.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (9) | Includes consumer balances that are placed on nonaccrual status when the
               collection of contractual principal or interest becomes 90 days past due.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (10) | Nonperforming loans includes loans held for sale of $2 million and $3 million at
               June 30, 2003 and 2002, respectively. These amounts are not included in
               allowance for credit losses coverage statistics.
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (11) | Related assets consist of loans outstanding, including loans held for sale, and
               other real estate owned.
| | ---- | -----------------------------------------------------------------------------------------------------------------------

8

---

# Retail  continued

Quarterly Results

Retail net income was $373 million,
up $13 million, or 4% (excluding the $11 million after-tax benefit from a restructuring
charge reversal in the prior year).

Total
revenue, net of interest expense increased 3% to $1.5 billion. Net interest income was
$1.1 billion, up 3%, primarily from growth in home equity loans and core deposits,
partially offset by lower time deposits and spread compression. Noninterest income was
$461 million, up 4%, as higher deposit service charges, debit card revenue, and investment
sales were partially offset by the intentional reduction of non-branded ATM machines and
the elimination of the teller service fee.

Noninterest
expense was $842 million, up 3% (excluding the $18 million pre-tax benefit from the
restructuring charge reversal in the prior year), primarily due to increased incentive
compensation and commissions, as well as higher benefit costs. This increase was partially
offset by lower fraud and other operating expenses.

The
provision for credit losses of $108 million was relatively unchanged as higher net
charge-offs in the real estate and vehicle portfolios were offset by lower net charge-offs
in tax-refund anticipation and small business loans. As a percentage of average loans, net
charge-offs were 0.85%, down from 0.90%.

The
allowance for credit losses of $688 million represented 1.33% of period-end loans.
Nonperforming assets were $788 million, up 11% from the prior year.

Year-To-Date Results

Retail year-to-date net income was
$768 million, up $44 million, or 6% (excluding the $11 million after-tax benefit from a
restructuring charge reversal in the prior year).

Total
revenue, net of interest expense increased 2% to $3.1 billion. Net interest income was
$2.2 billion, up 3%, primarily from growth in home equity loans and core deposits,
partially offset by lower time deposits and spread compression. Noninterest income was
$920 million, up 2%, as higher deposit service charges, debit card revenue, and revenues
generated from the sale of student loans were partially offset by the intentional
reduction of non-branded ATM machines.

Noninterest
expense increased $31 million, or 2% (excluding the $18 million pre-tax benefit from the
restructuring charge reversal in the prior year), primarily due to increased collections
expenses, benefit costs, incentive compensation and production related expenses. This
increase was partially offset by lower fraud and other operating expenses as well as other
expense improvements.

The
provision for credit losses was $224 million, down $22 million, or 9%, due primarily to
net charge-off improvements in the vehicle, small business commercial, and tax related
portfolios, partially offset by increases in home equity. As a percentage of average
loans, net charge-offs were 0.82%, down from 1.02%.

9

---

Commercial BankingCommercial Banking offers a broad
array of products, including global cash management, treasury services, capital markets,
commercial cards, lending and other noncredit products and services to corporate banking
and middle market banking customers.

|                                                  | Three Months Ended June 30 | Six Months Ended June 30
|------------------------------------------------- | -------------------------- | ------------------------
|
|
|INCOME STATEMENT DATA:                            |                            |                         
|Net interest income-FTE (3) (12)                  |                            |                         
|Banking fees and commissions (4)                  |                            |                         
|Credit card revenue (5)                           |                            |                         
|Service charges on deposits (6)                   |                            |                         
|Fiduciary and investment                          |                            |                         
|management fees (13)                              |                            |                         
|Investment securities losses                      |                            |                         
|Trading gains (losses) (14)                       |                            |                         
|Other income (loss)                               |                            |                         
|                                                 
|Total noninterest income                          |                            |                         
|                                                 
|Total revenue, net of interest expense            |                            |                         
|Provision for credit losses                       |                            |                         
|Salaries and employee benefits                    |                            |                         
|Other expense                                     |                            |                         
|                                                 
|Total noninterest expense before                  |                            |                         
|restructuring-related charges (reversals)         |                            |                         
|Restructuring-related charges (reversals)         |                            |                         
|                                                 
|Total noninterest expense                         |                            |                         
|                                                 
|Income before income taxes                        |                            |                         
|Applicable income taxes                           |                            |                         
|                                                 
|Net income (15)                                   |                            |                         
|                                                 
|Memo-Revenue by activity:                         |                            |                         
|Lending-related revenue                           |                            |                         
|Credit derivative hedge portfolio                 |                            |                         
|Global treasury services                          |                            |                         
|Capital markets (16)                              |                            |                         
|Other                                             |                            |                         
|                                                 
|FINANCIAL PERFORMANCE:                            |                            |                         
|Return on average common equity                   |                            |                         
|Efficiency ratio                                  |                            |                         
|Efficiency ratio excluding credit hedge portfolio |                            |                         
|Headcount:                                        |                            |                         
|Corporate banking                                 |                            |                         
|(including capital markets)                       |                            |                         
|Middle market                                     |                            |                         
|Global treasury services                          |                            |                         
|Operations, technology, and other administration  |                            |                         
|                                                 
|Total headcount                                   |                            |                         
|                                                 
|ENDING BALANCES:                                  |                            |                         
|Loans (17)                                        |                            |                         
|Assets                                            |                            |                         
|Demand deposits                                   |                            |                         
|Savings (18)                                      |                            |                         
|Time (18)                                         |                            |                         
|Foreign offices                                   |                            |                         
|                                                 
|Total deposits                                    |                            |                         
|Equity                                            |                            |                         
|                                                 
|AVERAGE BALANCES:                                 |                            |                         
|Loans                                             |                            |                         
|Assets                                            |                            |                         
|Demand deposits                                   |                            |                         
|Savings (18)                                      |                            |                         
|Time (18)                                         |                            |                         
|Foreign offices                                   |                            |                         
|                                                 
|Total deposits                                    |                            |                         
|Equity                                            |                            |                         
|                                                 

10

---

# Commercial Banking
 continued

|                                            | Three Months Ended June 30 | Six Months Ended June 30
|------------------------------------------- | -------------------------- | ------------------------
|
|
|CREDIT QUALITY                              |                            |                         
|Net charge-offs                             |                            |                         
|Annualized net charge-off ratio             |                            |                         
|Nonperforming assets:                       |                            |                         
|Nonperforming loans (19)                    |                            |                         
|Other, including OREO                       |                            |                         
|                                           
|Total nonperforming assets                  |                            |                         
|Allowance for credit losses                 |                            |                         
|Allowance to period end loans (17)          |                            |                         
|Allowance to nonperforming loans (19)       |                            |                         
|Nonperforming assets to related assets (11) |                            |                         
|                                           
|CORPORATE BANKING:                          |                            |                         
|Loans-ending balance                        |                            |                         
|-average balance                            |                            |                         
|Deposits-ending balance                     |                            |                         
|-average balance                            |                            |                         
|Credit quality:                             |                            |                         
|Net charge-offs                             |                            |                         
|Annualized net charge-off ratio             |                            |                         
|Nonperforming loans                         |                            |                         
|Nonperforming loans to total loans          |                            |                         
|                                           
|SYNDICATIONS:                               |                            |                         
|Lead arranger deals:                        |                            |                         
|Volume (in billions)                        |                            |                         
|Number of transactions                      |                            |                         
|League table standing-rank                  |                            |                         
|League table standing-market share          |                            |                         
|                                           
|MIDDLE MARKET BANKING:                      |                            |                         
|Loans-ending balance                        |                            |                         
|-average balance                            |                            |                         
|Deposits-ending balance                     |                            |                         
|-average balance                            |                            |                         
|Credit quality:                             |                            |                         
|Net charge-offs                             |                            |                         
|Annualized net charge-off ratio             |                            |                         
|Nonperforming loans                         |                            |                         
|Nonperforming loans to total loans          |                            |                         
|                                           

For additional footnote detail see
page 8.

| | (12) | Net interest income-FTE includes tax equivalent adjustments of $25 million and
               $23 million for the three months ended June 30, 2003 and 2002,
               respectively. For the six months ended June 30, 2003 and 2002, tax equivalent
               adjustments were $48 million and $44 million, respectively.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (13) | Fiduciary and investment management fees include asset management fees, personal
               trust fees, other trust fees and advisory fees.
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------

| | (14) | Trading gains (losses) primarily includes realized and unrealized mark-to-market
               changes from trading assets, derivative financial instruments and foreign
               exchange products.
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (15) | Net income before restructuring-related reversals, net of $1 million tax, was
               $144 million and $287 million for the three and six months ended June 30, 2002,
               respectively.
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (16) | Capital markets includes trading income and underwriting, syndicated lending and
               advisory fees.
| | ---- | --------------------------------------------------------------------------------------------------------------

| | (17) | Loans include loans held for sale of $327 million and $202 million at June 30, 2003 and 2002, respectively. These amounts are not included in allowance for credit losses coverage statistics.
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (18) | Prior period amounts have been reclassified to conform to the current presentation.
| | ---- | -----------------------------------------------------------------------------------

| | (19) | Nonperforming loans include loans held for sale of $6 million and $103 million
               at June 30, 2003 and 2002, respectively. These amounts are not included in
               allowance for credit losses coverage statistics.
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Quarterly Results

Commercial Banking net income was
$249 million, an increase of $105 million, or 73% (excluding the $3 million after-tax
benefit from a restructuring charge reversal in the prior year).

11

---

# Commercial Banking
 continued

The
current period included a $143 million pre-tax loss on the credit derivatives hedge
portfolio and the $95 million pre-tax reduction in allowance for credit losses. The prior
year included a $33 million pre-tax gain on the credit derivatives hedge portfolio.
Excluding the impact of the credit derivatives hedge portfolio and the allowance for
credit losses release, net income was $280 million, an increase of $154 million. The
improvement was driven by improved credit quality and strength in capital markets,
partially offset by declining loan volumes and deposit margin compression.

Net
interest income decreased 4% to $574 million, reflecting compressed deposit spreads from
falling interest rates and a 13% reduction in average loan volume, partially offset by
continued improvement in corporate banking and middle market loan spreads. In the
corporate bank, loan volumes declined, reflecting decreased demand for financing as well
as customers supporting their funding needs through public debt issuance.

Losses
on the credit derivatives hedge portfolio negatively impacted trading income by $143
million in the current quarter, compared to a $33 million positive impact to trading
income in the year-ago quarter. The current net notional amount of the credit derivatives
hedge portfolio was $5.3 billion.

Noninterest
income (excluding the impact of the credit derivatives hedge portfolio) was $519 million,
an increase of $98 million, or 23%. This increase was primarily due to higher capital
markets revenue, including fixed income and asset-backed originations and derivatives
trading, gains on loan sales in the current quarter compared to losses in the prior year,
and higher revenue from global treasury services.

Noninterest
expense of $600 million was relatively flat. Expense management efforts during the past
year held operating expenses relatively stable, despite higher compensation related
expenses.

Credit
quality continued to improve, as indicated by a $169 million, or 62%, decline in net
charge-offs, as corporate banking gross charge-offs declined and middle market recoveries
were higher than normal.

The
improvement in credit quality and reduced size of the loan portfolio led to a $95 million
reduction in the allowance for credit losses to $3.0 billion. Nonperforming loans declined
26% to $1.7 billion, reflecting declines of 39% in corporate banking and 13% in middle
market banking.

Year-To-Date Results

Commercial Banking reported net
income of $466 million, up $176 million, or 61%. The current year included a $197 million
pre-tax loss on the credit derivatives hedge portfolio and a $95 million pre-tax reduction
in the allowance for credit losses. Excluding the impact of the credit derivatives hedge
portfolio and the allowance for credit losses release, net income was $531 million, an
increase of $241 million. This improvement was primarily driven by improved credit quality
and strength in capital markets, partially offset by the impact of declining loan volumes
and deposit margin compression.

Net
interest income was $1.1 billion, down $110 million, or 9%, reflecting a 15% reduction in
average loan volume and compressed deposit spreads due to falling interest rates,
partially offset by improved loan spreads.

Noninterest
income (excluding the impact of the credit derivatives hedge portfolio) was $990 million,
an increase of $165 million, or 20%, from the first half of 2002. This increase was
primarily driven by higher revenue from a number of capital markets activities, gains on
loan sales in the current year compared to losses in the prior year, gains in
tax-oriented investments and increased revenue from global treasury services.

Ongoing
expense management efforts held noninterest expense fairly flat at $1.2 billion, despite
higher compensation related expenses.

Credit
quality improved significantly from 2002, as demonstrated by a $322 million, or 58%,
reduction in net charge-offs. The provision for credit losses was $138 million in 2003,
and included a $95 million reduction in the allowance for credit losses.

12

---

Card ServicesCard Services offers customers
co-brand, affinity and other credit cards, including leading corporations, financial
institutions, universities, sports franchises and affinity organizations. All of these
cards carry the respective VISA® or MasterCard®brand names.

With
more than 52 million cards in circulation, Card Services is the third-largest credit card
provider in the United States and the largest VISA credit card issuer in the world. Card
Services is also a leader in online card marketing and customer service, with more than
4.2 million registered users of its website.

# Reported Basis

|                                                  | Three Months Ended June 30 | Six Months Ended June 30
|------------------------------------------------- | -------------------------- | ------------------------
|
|
|INCOME STATEMENT DATA:                            |                            |                         
|Net interest income-FTE (3) (20) (21)             |                            |                         
|Banking fees and commissions (4)                  |                            |                         
|Credit card revenue (5) (20)                      |                            |                         
|Other income                                      |                            |                         
|                                                 
|Total noninterest income                          |                            |                         
|                                                 
|Total revenue, net of interest expense            |                            |                         
|Provision for credit losses                       |                            |                         
|Salaries and employee benefits                    |                            |                         
|Other expense                                     |                            |                         
|                                                 
|Total noninterest expense before                  |                            |                         
|restructuring-related charges (reversals)         |                            |                         
|Restructuring-related charges (reversals)         |                            |                         
|                                                 
|Total noninterest expense                         |                            |                         
|                                                 
|Income before income taxes                        |                            |                         
|Applicable income taxes                           |                            |                         
|                                                 
|Net income (22)                                   |                            |                         
|                                                 
|Memo-Net securitization gains                     |                            |                         
|(amortization)                                    |                            |                         
|                                                 
|FINANCIAL PERFORMANCE:                            |                            |                         
|Return on average common equity                   |                            |                         
|Efficiency ratio                                  |                            |                         
|Headcount                                         |                            |                         
|                                                 
|ENDING BALANCES:                                  |                            |                         
|Owned loans:                                      |                            |                         
|Held in portfolio                                 |                            |                         
|Held for sale (23)                                |                            |                         
|                                                 
|Total owned loans                                 |                            |                         
|Seller's interest and accrued interest receivable |                            |                         
|                                                 
|Total receivables                                 |                            |                         
|Assets                                            |                            |                         
|Equity                                            |                            |                         
|                                                 
|AVERAGE BALANCES:                                 |                            |                         
|Owned loans:                                      |                            |                         
|Held in portfolio                                 |                            |                         
|Held for sale (23)                                |                            |                         
|                                                 
|Total owned loans                                 |                            |                         
|Seller's interest and accrued interest receivable |                            |                         
|                                                 
|Total receivables                                 |                            |                         
|Assets                                            |                            |                         
|Equity                                            |                            |                         
|                                                 

13

---

# Card Services 
continued

|                                                | Three Months Ended June 30 | Six Months Ended June 30
|----------------------------------------------- | -------------------------- | ------------------------
|
|
|CREDIT QUALITY:                                 |                            |                         
|Net charge-offs                                 |                            |                         
|Annualized net charge-off ratio                 |                            |                         
|Delinquency ratio:                              |                            |                         
|30+ days                                        |                            |                         
|90+ days                                        |                            |                         
|Allowance for credit losses                     |                            |                         
|Allowance to period end loans held in portfolio |                            |                         
|                                               
|OTHER DATA:                                     |                            |                         
|Charge volume (in billions)                     |                            |                         
|New accounts opened (in thousands) (24)         |                            |                         
|Credit cards issued (in thousands)              |                            |                         
|Number of CardmemberServices.com                |                            |                         
|customers (in millions)                         |                            |                         
|Paymentech (in millions):                       |                            |                         
|Bank card volume                                |                            |                         
|Total transactions                              |                            |                         
|                                               

Quarterly Results 
Reported

Card Services net income
decreased 6% to $279 million (excluding the $12 million after-tax benefit from a
restructuring charge reversal in the prior year), primarily resulting from the continued
competitive pricing environment.

Total
revenue, net of interest expense remained flat at $1.2 billion. Net interest income
increased 24% to $332 million, reflecting higher owned loan balances, partially offset by
the impact of lower, more competitive yields. Average owned loan balances were $14.1
billion, an increase of $5.6 billion, or 67%, due to a lower percentage of securitized
loans to managed loans in the current period. End of period owned loans increased $5.0
billion, or 55%, from the prior year.

Noninterest
income declined 7% to $868 million, primarily driven by lower yields earned on securitized
loans partially offset by increased securitization activity and higher charge volume.
Noninterest income in both the current and prior year included modest gains from the sale
of small portfolios.

Paymentech
Inc., the Corporations merchant card processor, reported an increase in total
revenue of 19% to $149 million, resulting from a 32% increase in total transactions and a
24% increase in bank card volume, driven primarily by the purchase of the Scotia Bank
merchant acquirer business in the fourth quarter of 2002.

Noninterest
expense was $564 million, a decline of 7% (excluding the $19 million pre-tax benefit from
a restructuring charge reversal in the prior year), due to reduced marketing expenses. The
Corporation reduced direct mail marketing expense but increased spending for existing
customers.

Reported
net charge-offs were $182 million, an increase of $64 million, or 54%. The reported net
charge-off ratio was 5.17%, down from 5.58%. The reported 30-day delinquency ratio
increased to 3.22% from 2.72% in the prior year.

The
Corporation believes that it is more meaningful to discuss credit performance on a managed
basis since the on-balance sheet portfolio has a greater percentage of new originations
and, therefore, is less seasoned. See the Managed Basis section below for this
information.

Year-to-Date Results
 Reported

Card Services year-to-date net
income decreased 2% to $527 million (excluding the $12 million after-tax benefit from a
restructuring charge reversal in the prior year), primarily resulting from the continued
competitive pricing environment partially offset by reduced marketing expenses and expense
management.

Total
revenue, net of interest expense decreased 1% to $2.3 billion. Net interest income
increased 24% to $641 million, reflecting higher owned loan balances, partially offset by
the impact of lower, more competitive yields. Average owned loan balances were $13.2
billion, an increase of $5.4 billion, or 69%, due to a lower percentage of securitized
loans to managed loans in the current period.

14

---

Card Services  continued

Noninterest
income declined 8% to $1.6 billion, primarily driven by lower yields earned on securitized
loans and lower securitized loan balances partially offset by increased securitization
activity and higher charge volume. Noninterest income in both the current and prior year
included modest gains from the sale of small portfolios.

Paymentech
Inc., the Corporations merchant card processor, reported an increase in total
revenue of 16% to $283 million, resulting from a 31% increase in total transactions and a
24% increase in bank card volume, driven primarily by the purchase of the Scotia Bank
merchant acquirer business in the fourth quarter of 2002.

Noninterest
expense was $1.1 billion, a decline of 11% (excluding the $19 million pre-tax benefit from
a restructuring charge reversal in the prior year), due to reduced marketing expenses and
operational efficiencies.

Reported
net charge-offs were $343 million, an increase of $128 million, or 60%. The reported net
charge-off ratio was 5.18%, down from 5.48%.

The
Corporation believes that it is more meaningful to discuss credit performance on a managed
basis since the on-balance sheet portfolio has a greater percentage of new originations
and, therefore, is less seasoned. See the Managed Basis section below for this
information.

# Managed Basis

Through securitization, the
Corporation transforms a substantial portion of its credit card receivables into
securities, which are sold to investors. Securitization impacts the Corporations
consolidated balance sheet by removing those credit card receivables that have been sold
and by reclassifying those credit card receivables whose ownership has been transformed
into certificate form (referred to as sellers interest) from loans to
investments. Gain or loss on the sale of credit card receivables, net of amortization of
transaction costs and amortization from securitization repayments, is reported as
securitization income in other income. Securitization also impacts the Corporations
consolidated income statement by reclassifying interest income and fees, interchange
income, credit losses and recoveries related to securitized receivables as securitization
income. Credit card interest income and fees, interchange income, credit losses and
recoveries related to credit card receivables that have been converted to certificate form
are reclassified as investment income in net interest income.

The
Corporation evaluates its Card Services line of business trends on a managed basis, which
treats the securitization as a secured financing transaction and assumes that receivables
are still on the balance sheet. The Corporation manages its Card Services operations on a
managed basis because the receivables that are securitized are subject to underwriting
standards comparable to the owned portfolio and are serviced by operating personnel
without regard to ownership. The Corporation believes that investors should be informed,
and often request information, about the credit performance of the entire managed
portfolio in order to understand the quality of the Card Services originations and the
related credit risks inherent in the owned portfolio and retained interests in
securitizations. In addition, the Corporation funds its Card Services operations, reviews
operating results and makes decisions about allocating resources, such as employees and
capital, on a managed basis. See Loan Securitizations on page 41 and Note 9,
Credit Card Securitizations, on pages 94-95 of the Corporations 2002
Annual Report for additional information related to the Corporations securitization
activity.

15

# Card Services 
continued

The
following table presents Card Services information on a managed basis.

|                                                  | Three Months Ended June 30 | Six Months Ended June 30
|------------------------------------------------- | -------------------------- | ------------------------
|
|
|INCOME STATEMENT DATA:                            |                            |                         
|Net interest income-FTE (3) (20) (21)             |                            |                         
|                                                  |                            |                         
|Banking fees and commissions (4)                  |                            |                         
|Credit card revenue (5)                           |                            |                         
|Other loss                                        |                            |                         
|                                                 
|Total noninterest income (21)                     |                            |                         
|                                                 
|Total revenue, net of interest expense            |                            |                         
|                                                  |                            |                         
|Provision for credit losses (21)                  |                            |                         
|                                                  |                            |                         
|Salaries and employee benefits                    |                            |                         
|Other expense                                     |                            |                         
|                                                 
|Total noninterest expense before                  |                            |                         
|restructuring-related charges (reversals)         |                            |                         
|Restructuring-related charges (reversals)         |                            |                         
|                                                 
|Total noninterest expense                         |                            |                         
|                                                 
|Income before income taxes                        |                            |                         
|Applicable income taxes                           |                            |                         
|                                                 
|Net income (22)                                   |                            |                         
|                                                 
|Memo-Net securitization gains                     |                            |                         
|(amortization)                                    |                            |                         
|                                                 
|FINANCIAL PERFORMANCE:                            |                            |                         
|Percentage of average outstandings:               |                            |                         
|Net interest income - FTE                         |                            |                         
|Provision for credit losses                       |                            |                         
|Noninterest income                                |                            |                         
|Risk adjusted margin                              |                            |                         
|Noninterest expense                               |                            |                         
|Pretax income - FTE                               |                            |                         
|Net income                                        |                            |                         
|                                                  |                            |                         
|Return on average common equity                   |                            |                         
|Efficiency ratio                                  |                            |                         
|Headcount                                         |                            |                         
|                                                 
|ENDING BALANCES:                                  |                            |                         
|Held in portfolio                                 |                            |                         
|Held for sale (23)                                |                            |                         
|Securitized                                       |                            |                         
|Seller's interest and accrued interest receivable |                            |                         
|                                                 
|Total loans                                       |                            |                         
|                                                  |                            |                         
|Assets                                            |                            |                         
|Equity                                            |                            |                         
|                                                 
|AVERAGE BALANCES:                                 |                            |                         
|Held in portfolio                                 |                            |                         
|Held for sale (23)                                |                            |                         
|Securitized                                       |                            |                         
|Seller's interest and accrued interest receivable |                            |                         
|                                                 
|Total loans                                       |                            |                         
|                                                  |                            |                         
|Assets                                            |                            |                         
|Equity                                            |                            |                         
|                                                 

16

---

# Card Services 
continued

|                                                | Three Months Ended June 30 | Six Months Ended June 30
|----------------------------------------------- | -------------------------- | ------------------------
|
|
|CREDIT QUALITY:                                 |                            |                         
|Net charge-offs                                 |                            |                         
|                                                |                            |                         
|Annualized net charge-off ratio                 |                            |                         
|12 month lagged (25)                            |                            |                         
|                                                |                            |                         
|Delinquency ratio:                              |                            |                         
|30+ days                                        |                            |                         
|90+ days                                        |                            |                         
|                                                |                            |                         
|Allowance for credit losses                     |                            |                         
|                                                |                            |                         
|Allowance to period end loans held in portfolio |                            |                         
|                                               
|OTHER DATA:                                     |                            |                         
|Charge volume (in billions)                     |                            |                         
|New accounts opened (in thousands) (24)         |                            |                         
|Credit cards issued (in thousands)              |                            |                         
|Number of CardmemberServices.com                |                            |                         
|customers (in millions)                         |                            |                         
|Paymentech (in millions):                       |                            |                         
|Bank card volume                                |                            |                         
|Total transactions                              |                            |                         
|                                               

For additional footnote detail see
pages 8 and 11.

| | (20) | Net interest income-FTE did not have tax equivalent adjustments for the three
               and six months ended June 30, 2003 and 2002, respectively.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------

| | (21) | On a reported basis, income earned on securitized loans is reported in credit
               card revenue and income earned on sellers interest is reported in net
               interest income. On a managed basis, net interest income, noninterest income and
               provision for credit losses are reported in their respective income statement
               lines.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (22) | Net income before restructuring-related reversals, net of $7 million tax, was
               $296 million and $535 million for the three and six months ended June 30, 2002,
               respectively.
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (23) | On a reported basis, these amounts are not included in allowance for credit
               losses coverage statistics.
| | ---- | ----------------------------------------------------------------------------------------------------------------------

| | (24) | Net accounts opened includes originations, purchases and sales.
| | ---- | ---------------------------------------------------------------

| | (25) | 2002 ratio includes Wachovia net charge-offs but excludes Wachovia loans.
| | ---- | -------------------------------------------------------------------------

Quarterly Results 
Managed

Card Services net income
decreased 6% to $279 million (excluding the $12 million after-tax benefit from a
restructuring charge reversal in the prior year), primarily resulting from the continued
competitive pricing environment.

Total
revenue, net of interest expense decreased 2% to $2.0 billion. Net interest income
declined 2% to $1.5 billion, reflecting lower, more competitive yields, partially offset
by the effect of higher managed loan balances. Average managed loans were $73.0 billion,
an increase of $7.1 billion, or 11%. End of period loans increased $7.5 billion, or 11%,
from the prior year.

Noninterest
income of $481 million was essentially flat. The benefit of increased securitization
activity and interchange revenue due to higher charge volume was offset by higher revenue
sharing paid to partners (a deduction from revenue). Noninterest income in both the
current and prior year included modest gains from the sale of small portfolios.

Paymentech
Inc., the Corporations merchant card processor, reported an increase in total
revenue of 19% to $149 million, resulting from a 32% increase in total transactions and a
24% increase in bank card volume, driven primarily by the purchase of the Scotia Bank
merchant acquirer business in the fourth quarter of 2002.

Noninterest
expense was $564 million, a decline of 7% (excluding the $19 million pre-tax benefit from
a restructuring charge reversal in the prior year), due to reduced marketing expenses. The
Corporation reduced direct mail marketing expense but increased spending for existing
customers.

Managed
net charge-offs increased $25 million, or 3%, to $951 million primarily driven by higher
managed loan balances. The managed net charge-off ratio improved to 5.21% from 5.62%,
aided in part by slightly higher than normal recoveries. The managed 30-day delinquency
ratio, however, increased to 3.95% from 3.83% in the prior year.

17

---

# Card Services 
continued

Year-To-Date Results
 Managed

Card Services year-to-date net
income decreased 2% to $527 million (excluding the $12 million after-tax benefit from a
restructuring charge reversal in the prior year), primarily resulting from the continued
competitive pricing environment partially offset by reduced marketing expenses and expense
management.

Total
revenue, net of interest expense decreased 3% to $3.9 billion. Net interest income
decreased 4% to $3.0 billion, reflecting lower, more competitive yields partially offset
by the effect of higher managed loan balances. Average managed loan balances were $73.2
billion, an increase of $7.1 billion, or 11%.

Noninterest
income increased 2% to $904 million, primarily driven by increased securitization activity
and interchange revenue due to higher charge volume partially offset by higher revenue
sharing paid to partners (a deduction from revenue). Noninterest income in both the
current and prior year included modest gains from the sale of small portfolios.

Paymentech
Inc., the Corporations merchant card processor, reported an increase in total
revenue of 16% to $283 million, resulting from a 31% increase in total transactions and a
24% increase in bank card volume, driven primarily by the purchase of the Scotia Bank
merchant acquirer business in the fourth quarter of 2002.

Noninterest
expense was $1.1 billion, a decline of 11% (excluding the $19 million pre-tax benefit from
a restructuring charge reversal in the prior year), due to reduced marketing expenses and
operational efficiencies.

Managed
net charge-offs were $1.9 billion, an increase of $53 million, or 3%, primarily driven by
higher managed loan balances partially offset by slightly higher than normal recoveries.
The managed net charge-off ratio was 5.25%, down from 5.66%.

18

---

# Card Services 
continued

The
following table reconciles line items presented on a reported basis with those presented
on a managed basis:

|                                                  | Three Months Ended June 30 | Six Months Ended June 30
|------------------------------------------------- | -------------------------- | ------------------------
|
|INCOME STATEMENT DATA:                            |                            |                         
|Net interest income - FTE (3) (21)                |                           
|Reported data for the period                      |                            | $      332              
|Securitization adjustments                        |                            | 1,156                   
|                                                 
|Managed net interest income                       |                            | 1,488                   
|                                                  |                            |                         
|Credit card revenue:                              |                           
|Reported data for the period                      |                            | $      825              
|Securitization adjustments                        |                            | (387                    
|                                                 
|Managed credit card revenue                       |                            | 438                     
|                                                  |                            |                         
|Noninterest income:                               |                           
|Reported data for the period                      |                            | $      868              
|Securitization adjustments                        |                            | (387                    
|                                                 
|Managed noninterest income                        |                            | 481                     
|                                                  |                            |                         
|Total revenue, net of interest expense:           |                           
|Reported data for the period                      |                            | $   1,200               
|Securitization adjustments                        |                            | 769                     
|                                                 
|Managed total revenue, net of interest expense    |                            | 1,969                   
|                                                  |                            |                         
|Provision for credit losses                       |                           
|Reported data for the period                      |                            | $      182              
|Securitization adjustments                        |                            | 769                     
|                                                 
|Managed provision for credit losses               |                            | 951                     
|                                                 
|ENDING BALANCES:                                  |                           
|Owned loans:                                      |                           
|Held in portfolio                                 |                            | $   6,308               
|Held for sale (23)                                |                            | 7,782                   
|                                                 
|Total owned loans                                 |                            | 14,090                  
|Seller's interest and accrued interest receivable |                            | 24,414                  
|                                                 
|Total receivables                                 |                            | 38,504                  
|Securitized loans                                 |                            | 35,832                  
|                                                 
|Total managed loans                               |                            | 74,336                  
|                                                  |                            |                         
|Assets:                                           |                           
|Reported                                          |                            | $ 43,597                
|Securitization adjustments                        |                            | 35,832                  
|                                                 
|Managed assets                                    |                            | 79,429                  
|                                                 
|AVERAGE BALANCES:                                 |                           
|Owned loans:                                      |                           
|Held in portfolio                                 |                            | $   7,085               
|Held for sale (23)                                |                            | 7,005                   
|                                                 
|Total owned loans                                 |                            | 14,090                  
|Seller's interest and accrued interest receivable |                            | 23,281                  
|                                                 
|Total receivables                                 |                            | 37,371                  
|Securitized loans                                 |                            | 35,664                  
|                                                 
|Total managed loans                               |                            | 73,035                  
|                                                  |                            |                         
|Total assets:                                     |                           
|Reported                                          |                            | $ 42,886                
|Securitization adjustments                        |                            | 35,664                  
|                                                 
|Managed assets                                    |                            | 78,550                  
|                                                 
|CREDIT QUALITY:                                   |                           
|Net charge-offs                                   |                           
|Reported                                          |                            | $      182              
|Securitization adjustments                        |                            | 769                     
|                                                 
|Managed net charge-offs                           |                            | 951                     
|                                                 

19

---

Investment ManagementThe Investment Management Group (IMG)
provides investment, insurance, trust and private banking services to individuals. IMG
also provides investment and investment-related services, including retirement and custody
services, securities lending and corporate trust services to institutions. On July 24,
2003, the Corporation announced an agreement to sell the Corporate Trust Services
business, part of the Investment Management line of business. The sale price is $720
million, of which approximately 10% is contingent upon business retention. The sale
includes corporate, municipal, structured finance and escrow businesses as well as the
document custody and London corporate trust operations. The closing of the transaction,
pending regulatory approvals, is expected to occur later this year.

|                                                        | Three Months Ended June 30 | Six Months Ended June 30
|------------------------------------------------------- | -------------------------- | ------------------------
|
|
|INCOME STATEMENT DATA:                                  |                            |                         
|Net interest income-FTE (3) (26)                        |                            |                         
|                                                        |                            |                         
|Banking fees and commissions (4)                        |                            |                         
|Service charges on deposits (6)                         |                            |                         
|Fiduciary and investment                                |                            |                         
|management fees                                         |                            |                         
|Other income                                            |                            |                         
|                                                       
|Total noninterest income                                |                            |                         
|                                                       
|Total revenue, net of interest expense                  |                            |                         
|                                                        |                            |                         
|Provision for credit losses                             |                            |                         
|                                                        |                            |                         
|Salaries and employee benefits                          |                            |                         
|Other expense                                           |                            |                         
|                                                       
|Total noninterest expense before                        |                            |                         
|restructuring-related charges (reversals)               |                            |                         
|Restructuring-related charges (reversals)               |                            |                         
|                                                       
|Total noninterest expense                               |                            |                         
|                                                       
|Income before income taxes                              |                            |                         
|Applicable income taxes                                 |                            |                         
|                                                       
|Net income (27)                                         |                            |                         
|                                                       
|Memo-Consolidated gross insurance related revenues (28) |                            |                         
|                                                       
|FINANCIAL PERFORMANCE:                                  |                            |                         
|Return on average common equity                         |                            |                         
|Efficiency ratio                                        |                            |                         
|Headcount                                               |                            |                         
|                                                       
|ENDING BALANCES:                                        |                            |                         
|Loans                                                   |                            |                         
|Commercial                                              |                            |                         
|Consumer                                                |                            |                         
|                                                        |                            |                         
|Assets                                                  |                            |                         
|                                                        |                            |                         
|Demand deposits                                         |                            |                         
|Savings                                                 |                            |                         
|Time                                                    |                            |                         
|Foreign offices                                         |                            |                         
|                                                       
|Total deposits                                          |                            |                         
|                                                        |                            |                         
|Equity                                                  |                            |                         
|                                                       
|AVERAGE BALANCES:                                       |                            |                         
|Loans                                                   |                            |                         
|Commercial                                              |                            |                         
|Consumer                                                |                            |                         
|                                                        |                            |                         
|Assets                                                  |                            |                         
|                                                        |                            |                         
|Demand deposits                                         |                            |                         
|Savings                                                 |                            |                         
|Time                                                    |                            |                         
|Foreign offices                                         |                            |                         
|                                                       
|Total deposits                                          |                            |                         
|                                                        |                            |                         
|Equity                                                  |                            |                         
|                                                       

20

---

# Investment Management
 continued

|                                            | Three Months Ended June 30 | Six Months Ended June 30
|------------------------------------------- | -------------------------- | ------------------------
|
|
|CREDIT QUALITY:                             |                            |                         
|Net charge-offs:                            |                            |                         
|Commercial                                  |                            |                         
|Consumer                                    |                            |                         
|                                           
|Total net charge-offs                       |                            |                         
|                                            |                            |                         
|Annualized net charge-off ratios:           |                            |                         
|Commercial                                  |                            |                         
|Consumer                                    |                            |                         
|Total net charge-off ratio                  |                            |                         
|                                            |                            |                         
|Nonperforming assets:                       |                            |                         
|Commercial                                  |                            |                         
|Consumer                                    |                            |                         
|                                           
|Total nonperforming loans                   |                            |                         
|Other, including OREO                       |                            |                         
|                                           
|Total nonperforming assets                  |                            |                         
|                                            |                            |                         
|Allowance for credit losses                 |                            |                         
|Allowance to period end loans               |                            |                         
|Allowance to nonperforming loans            |                            |                         
|Nonperforming assets to related assets (11) |                            |                         
|                                           
|ASSETS UNDER MANAGEMENT                     |                            |                         
|ENDING BALANCES:                            |                            |                         
|Mutual funds                                |                            |                         
|Other                                       |                            |                         
|                                           
|Total assets                                |                            |                         
|                                            |                            |                         
|By type:                                    |                            |                         
|Money market                                |                            |                         
|Equity                                      |                            |                         
|Fixed income                                |                            |                         
|                                           
|Total assets                                |                            |                         
|                                            |                            |                         
|By channel:                                 |                            |                         
|Private client services                     |                            |                         
|Retail brokerage                            |                            |                         
|Institutional                               |                            |                         
|Commercial cash sweep                       |                            |                         
|Capital markets                             |                            |                         
|External (29)                               |                            |                         
|All other direct (30)                       |                            |                         
|                                           
|Total assets                                |                            |                         
|                                            |                            |                         
|Morningstar® Rankings:                      |                            |                         
|% of 4 and 5 ranked funds                   |                            |                         
|% of 3+ ranked funds                        |                            |                         
|                                           
|CORPORATE TRUST SECURITIES                  |                            |                         
|ENDING BALANCES (in billions):              |                            |                         
|Corporate trust securities                  |                            |                         
|under administration                        |                            |                         
|                                           
|PRIVATE CLIENT SERVICES:                    |                            |                         
|Number of private client advisors           |                            |                         
|Number of private client offices            |                            |                         
|                                            |                            |                         
|Total client assets-end of                  |                            |                         
|period (31)                                 |                            |                         
|                                            |                            |                         
|Ending balances                             |                            |                         
|Loans                                       |                            |                         
|Deposits                                    |                            |                         
|                                            |                            |                         
|Average balances                            |                            |                         
|Loans                                       |                            |                         
|Deposits                                    |                            |                         
|                                           

For additional footnote detail see
pages 8, 11 and 17.

| | (26) | Net interest income-FTE did not have material tax equivalent adjustments for the
               three or six months ended June 30, 2003 and 2002.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------

| | (27) | Net income before restructuring-related reversals was $102 million and $203
               million for the three and six months ended June 30, 2002, respectively.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (28) | Includes insurance related revenues recorded in other lines of business.
| | ---- | ------------------------------------------------------------------------

| | (29) | Includes broker/dealers, trust companies, and registered investment advisors
               that sell, or offer, One Group funds.
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------

| | (30) | One Group funds invested in other One Group funds and other mutual funds
               sub-advised.
| | ---- | ----------------------------------------------------------------------------------------------------

| | (31) | Fiduciary, brokerage and other related assets (managed and
               non-managed).
| | ---- | ---------------------------------------------------------------------------------------

21

---

# Investment Management
 continued

Quarterly Results

Investment Management net income
totaled $85 million, a decline of $18 million, or 17%, reflecting a shift in mix of assets
under management, deposit spread compression and higher operating costs.

Assets
under management increased $24.9 billion, or 17%, to $170.9 billion, reflecting strong
money market and fixed income asset growth. Assets under management through the
institutional and external channels increased $28.8 billion, or 41%, partially offset by a
decline in Private Client Services assets under management of $3.2 billion, or 7%.
One Group mutual funds assets increased 14% to $102.5 billion.

Net
interest income decreased 5% to $100 million. Deposit spread compression offset the
continued strong average deposit growth of $1.5 billion, or 16%.

Noninterest
income declined 4% to $256 million. Despite positive overall net fund inflows, noninterest
income was negatively impacted by the continued shift in assets under management from
equities to money market and fixed income. Net outflows in Private Client Services and
weak equity markets contributed to the shift in asset mix.

Noninterest
expense increased 3% to $215 million, reflecting higher compensation expense. Salaries and
benefits increased despite an overall decline in headcount, due to higher benefit costs
and a change in the skill mix of the employee base.

The
provision for credit losses was $6 million, up $6 million from a year ago, reflecting
deterioration in credit quality of certain large loans and the absence of recoveries that
occurred in the second quarter 2002.

Year-to-Date Results

Investment Management reported
year-to-date net income of $165 million, down $39 million, or 19%, driven by lower
revenue, higher provision for credit losses, and increased operating expenses.

Year-to-date
total revenue, net of interest expense decreased $38 million, or 5%, to $702 million,
primarily due to deposit spread compression, and a shift in asset mix from equities to
money market and fixed income.

Non-interest
expense was $431 million, an increase of $19 million, or 5%, reflecting higher operating
costs, and higher salary-related costs due to a change in the skill mix of the employee
base.

The
provision for credit losses was $8 million, an increase of $3 million, or 60%, reflecting
deterioration in credit quality of certain large loans, and the absence of recoveries
which occurred in the second quarter of 2002.

22

---

CorporateCorporate includes treasury
activities, investment portfolios, non-core portfolios transferred from the Retail line of
business, other unallocated corporate expenses, and any gains or losses from corporate
transactions. Information related to the non-core portfolios is included in the table
below. See page 26 for financial information for the non-core portfolios on a stand-alone
basis.

|                                                | Three Months Ended June 30 | Six Months Ended June 30
|----------------------------------------------- | -------------------------- | ------------------------
|
|
|INCOME STATEMENT DATA:                          |                            |                         
|Net interest income (expense)-FTE (3) (32) (33) |                            |                         
|Banking fees and commissions (4)                |                            |                         
|Credit card revenue (5)                         |                            |                         
|Service charges on deposits (6)                 |                            |                         
|Fiduciary and investment management fees        |                            |                         
|Investment securities gains                     |                            |                         
|Trading (losses)                                |                            |                         
|Other income                                    |                            |                         
|                                               
|Total noninterest income (34)                   |                            |                         
|                                               
|Total revenue, net of interest expense          |                            |                         
|                                                |                            |                         
|Provision for credit losses                     |                            |                         
|                                                |                            |                         
|Salaries and employee benefits                  |                            |                         
|Other expense                                   |                            |                         
|                                               
|Total noninterest expense before                |                            |                         
|restructuring-related charges (reversals)       |                            |                         
|Restructuring-related charges (reversals)       |                            |                         
|                                               
|Total noninterest expense (35)                  |                            |                         
|                                               
|Loss before income tax benefit                  |                            |                         
|Applicable income tax benefit                   |                            |                         
|                                               
|Net loss (36)                                   |                            |                         
|                                               
|FINANCIAL PERFORMANCE:                          |                            |                         
|Headcount                                       |                            |                         
|                                               
|ENDING BALANCES:                                |                            |                         
|Non-core portfolios                             |                            |                         
|Other loans                                     |                            |                         
|                                               
|Total loans (37)                                |                            |                         
|                                                |                            |                         
|Assets                                          |                            |                         
|Memo-                                           |                            |                         
|Treasury investments (38)                       |                            |                         
|Principal investments (39)                      |                            |                         
|                                                |                            |                         
|Deposits                                        |                            |                         
|                                                |                            |                         
|Equity                                          |                            |                         
|                                               
|AVERAGE BALANCES:                               |                            |                         
|Non-core portfolios                             |                            |                         
|Other loans                                     |                            |                         
|                                               
|Loans                                           |                            |                         
|                                                |                            |                         
|Assets                                          |                            |                         
|                                                |                            |                         
|Deposits                                        |                            |                         
|                                                |                            |                         
|Equity                                          |                            |                         
|                                               

23

---

# Corporate 
continued

|                                         | Three Months Ended June 30 | Six Months Ended June 30
|---------------------------------------- | -------------------------- | ------------------------
|
|
|CREDIT QUALITY:                          |                            |                         
|Net Charge-offs:                         |                            |                         
|Non-core portfolios                      |                            |                         
|Other loans                              |                            |                         
|                                        
|Total loans                              |                            |                         
|                                         |                            |                         
|Non-core portfolios net charge-off ratio |                            |                         
|                                         |                            |                         
|Nonperforming assets:                    |                            |                         
|Non-core portfolios                      |                            |                         
|Other loans                              |                            |                         
|                                        
|Total loans                              |                            |                         
|Other including OREO                     |                            |                         
|                                        
|Total nonperforming assets (40)          |                            |                         
|                                         |                            |                         
|Allowance for credit losses              |                            |                         
|Allowance to period end loans (37)       |                            |                         
|Allowance to nonperforming loans (40)    |                            |                         
|Nonperforming assets to related assets   |                            |                         
|                                        

For additional footnote detail see
pages 8, 11, 17 and 21.

| | (32) | Net interest income (expense)-FTE includes tax equivalent adjustments of $9
               million and $8 million for the three months ended June 30, 2003 and 2002,
               respectively. For the six months ended June 30, 2003 and 2002, tax equivalent
               adjustments were $17 million.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (33) | Net interest income (expense)-FTE primarily includes treasury results and
               interest spread on investment related activities.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------

| | (34) | Noninterest income primarily includes the gains and losses from investment
               activities and other corporate transactions.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------

| | (35) | Noninterest expense primarily includes corporate expenses not allocated to the
               lines of business.
| | ---- | ----------------------------------------------------------------------------------------------------------------

| | (36) | Net loss before merger and restructuring-related
               reversals, net of $8 million tax, was $99 million and $159 million for the three and six months ended June 30, 2002, respectively.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (37) | Loans include loans held for sale of $18 million and $26 million at June 30,
               2003 and 2002, respectively. These amounts are not included in allowance for
               credit losses coverage statistics.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (38) | Treasury investments may include U.S. government and agency debt securities,
               mortgage and other asset-backed securities and other fixed income investments.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (39) | Principal investments include primarily private equity investments and venture
               capital fund investments.
| | ---- | -----------------------------------------------------------------------------------------------------------------------

| | (40) | Nonperforming loans include loans held for sale
               of $3 million and $1 million at June 30, 2003 and 2002, respectively. These amounts are not included in allowance for credit losses coverage
          statistics.
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Quarterly Results

Including Non-core
Portfolios

Corporate net loss totaled $130
million, compared with a net loss of $99 million (excluding the $13 million after-tax
benefit from a restructuring charge reversal in the prior year).

Excluding Non-core
Portfolios

Net interest expense was $166
million, an increase of $68 million over the prior year. In 2002, the Corporation extended
liability duration and repositioned the treasury investment portfolio in order to position
the balance sheet more defensively for rising interest rates.

Net
securities gains from treasury activities and the investment portfolios were $154 million,
compared to net securities gains of $97 million. The prior year included the $261 million
gain on the sale of the GE Monogram joint venture. Valuation adjustments included in each
periods net securities gains were primarily a result of changes in the value of the
publicly traded equity market, the interest rate environment and economic conditions.

Corporate
expenses were $154 million, compared to $236 million (excluding the $21 million pre-tax
benefit from a restructuring charge reversal in the prior year). Corporate expenses for
the second quarter of 2002 include $89 million of expenses for the termination of certain
vendor contracts, renegotiation of others and the bringing in-house of various network, technology and programming functions.

24

---

# Corporate 
continued

Non-core Portfolios

Net interest income related to the
non-core portfolios was $103 million, down $54 million from the prior year, primarily due
to the continued liquidation of these portfolios. Provision for credit losses was $156
million, including $85 million that was added to the allowance for credit losses. The
provision for credit losses increased $48 million, primarily reflecting the change in the
overall risk profile of these portfolios. The net charge-off ratio increased to 2.60% from
2.24%.

Noninterest
expense for the non-core portfolios remained relatively unchanged at $50 million.

Year-to-Date Results

Including Non-core
Portfolios

Corporate net loss totaled $252
million, compared with a net loss of $159 million (excluding the $13 million after-tax
benefit from a restructuring charge reversal in the prior year).

Excluding Non-core
Portfolios

Net interest expense was $349
million, an increase of $208 million. In 2002, the Corporation extended liability duration
and repositioned the treasury investment portfolio in order to position the balance sheet
more defensively for rising interest rates.

Net
securities gains from Treasury activities and the investment portfolios were $223 million,
compared to net securities gains of $79 million. The prior year included the $261 million
gain on the sale of the GE Monogram joint venture. Valuation adjustments included in each
periods net securities gains were primarily a result of changes in the value of the
publicly traded equity market, the interest rate environment and economic conditions.

Corporate
expenses were $274 million, compared to $323 million (excluding the $21 million pre-tax
benefit from a restructuring charge reversal). Corporate expenses for the second quarter
of 2002 included $89 million of expenses for the termination of certain vendor contracts,
renegotiation of others and the bringing in-house of various network, technology and
programming functions.

Non-core Portfolios

Net interest income related to the
non-core portfolios was $217 million, down $105 million, primarily due to the continued
liquidation of these portfolios. Provision for credit losses for the six-month period was
$245 million, including $85 million that was added to the allowance for credit losses. The
increase primarily reflects the change in the overall risk profile of these portfolios.

Noninterest
expense for the non-core portfolios was $97 million compared to $102 million, remaining
relatively unchanged.

25

---

Non-core PortfoliosThe following table presents
financial information for the non-core portfolios which were transferred from the Retail
line of business to the Corporate line of business. This information is reflected in the
Corporate line of business financial information.

|                                       | Three Months Ended June 30 | Six Months Ended June 30
|-------------------------------------- | -------------------------- | ------------------------
|
|
|INCOME STATEMENT DATA:                 |                            |                         
|Net interest income-FTE (3)            |                            |                         
|Noninterest income (loss)              |                            |                         
|                                      
|Total revenue, net of interest expense |                            |                         
|                                       |                            |                         
|Provision for credit losses            |                            |                         
|                                       |                            |                         
|Salaries and employee benefits         |                            |                         
|Other expense                          |                            |                         
|                                      
|Total noninterest expense              |                            |                         
|                                      
|Loss before income tax benefit         |                            |                         
|Applicable income tax benefit          |                            |                         
|                                      
|Net loss                               |                            |                         
|                                      
|FINANCIAL PERFORMANCE:                 |                            |                         
|Return on equity                       |                            |                         
|Efficiency ratio                       |                            |                         
|Headcount                              |                            |                         
|                                      
|ENDING BALANCES:                       |                            |                         
|Small business commercial              |                            |                         
|Home equity                            |                            |                         
|Vehicle loans and leases               |                            |                         
|Other personal loans                   |                            |                         
|                                      
|Total Loans (1)                        |                            |                         
|                                       |                            |                         
|Equity                                 |                            |                         
|                                      
|AVERAGE BALANCES:                      |                            |                         
|Small business commercial              |                            |                         
|Home equity                            |                            |                         
|Vehicle loans and leases               |                            |                         
|Other personal loans                   |                            |                         
|                                      
|Total Loans (1)                        |                            |                         
|Equity                                 |                            |                         
|                                      
|CREDIT QUALITY:                        |                            |                         
|Net charge-offs                        |                            |                         
|Small business commercial              |                            |                         
|Home equity                            |                            |                         
|Vehicle loans and leases               |                            |                         
|Other personal loans                   |                            |                         
|                                      
|Total net charge-offs                  |                            |                         
|                                       |                            |                         
|Annualized net charge-off ratios:      |                            |                         
|Small business commercial              |                            |                         
|Home equity                            |                            |                         
|Vehicle loans and leases               |                            |                         
|Other personal loans                   |                            |                         
|                                      
|Total net charge-offs                  |                            |                         
|                                      
|Nonperforming assets:                  |                            |                         
|Commercial                             |                            |                         
|Consumer                               |                            |                         
|                                      
|Total nonperforming loans              |                            |                         
|                                       |                            |                         
|Allowance for credit losses            |                            |                         
|Allowance to period end loans          |                            |                         
|Allowance to nonperforming loans       |                            |                         
|Nonperforming assets to related assets |                            |                         
|                                      

26

---

BALANCE SHEET ANALYSIS(All comparisons are to December 31,
2002, unless otherwise specified.)

Investment securities totaled $75.2
billion compared with $67.6 billion. This increase of $7.6 billion, or 11%, was driven by
an increase of $8.5 billion, or 24%, in U.S. government agencies and an increase of $2.5
billion, or 65%, in U.S. Treasuries. These increases reflected the repositioning of the
treasury investment portfolio in order to position the balance sheet more defensively for
rising interest rates. Partially offsetting these increases was a decrease of $4.1
billion, or 17%, in retained interests in securitized credit card receivables.

The
Corporations loan portfolio was $144.6 billion compared with $148.1 billion, a
decrease of $3.5 billion. Commercial Banking loans totaled $57.8 billion compared to $61.9
billion, a decrease of $4.1 billion, or 7%. Commercial Banking loan volume declines
reflected decreased demand for financing as well as certain customers supporting their
funding through public debt issuance. The non-core portfolios included in the Corporate
line of business totaled $12.2 billion, a decrease of $3.2 billion, or 21%. This decrease
reflected the run off of the non-core portfolios. Partially offsetting these decreases
were higher loan balances in Card Services and Retail. Card Services loans totaled
$14.1 billion compared to $11.6 billion, an increase of $2.5 billion, or
22%. During the quarter, 1.8 million net credit card accounts were opened, which includes
originations, acquisitions and sales. Retail loans totaled $53.7 billion compared with
$52.3 billion, an increase of $1.4 billion, or 3%, due primarily to growth in
home equity loans.

Total
deposits were $172 billion compared to $170 billion, an increase of $2 billion. Savings
deposits totaled $95.2 billion compared to $88.9 billion, an increase of $6.3 billion, or
7%. Offsetting this increase was a decrease in time deposits of $4.5 billion, or 15%,
primarily resulting from the reduced interest rate environment.

Other
liabilities increased $5 billion, to $16 billion, due to an increase in accounts payable
resulting from unsettled investment securities trades made as part of the continuing
repositioning of the treasury investment portfolio.

Treasury
stock increased $1.2 billion, reflecting the impact of repurchasing over 39 million shares
of the Corporations stock under the previous $2 billion stock repurchase program.
See page 45 for additional information on the stock repurchase program.

RISK MANAGEMENT

Risk is an inherent part of the
Corporations business activity. The Corporations ability to properly and
effectively identify, measure, monitor, and report risk in its business activities is
critical to its soundness and profitability. The diversity of the Corporations lines
of business helps reduce the impact of volatility in any particular area on its operating
results as a whole.

Risk TypesThere are seven major risk types
identified by the Corporation:

- Credit risk is the risk to earnings or capital arising from an obligors
failure to meet the terms of any contract with the lender or otherwise fail to perform as
agreed.
- Liquidity risk is the risk of loss arising from an institutions inability to
meet its obligations when they come due without incurring unacceptable losses.
- Market risk is the risk that changes in future market rates or prices will make the
Corporations positions less valuable.
- Operational risk is the risk of loss resulting from inadequate or failed internal
processes, people or systems or from external events.
- Reputation risk is the risk to earnings or capital arising from negative public
opinion. This affects the institutions ability to establish new relationships or
services, or continue servicing existing relationships.
- Strategic risk is the risk to earnings or capital arising from adverse business
decisions or improper implementation of those decisions.
- Compliance risk is the risk to earnings or capital arising from violations of, or
non-conformance with, laws, rules, regulations, prescribed practices, or ethical
standards.

The following discussion of the
Corporations risk management process focuses primarily on developments since
December 31, 2002. The Corporations risk management processes for credit, liquidity,
market and operational risks have not

27

---

substantially changed from year-end and are
described in detail in the Corporations 2002 Annual Report, beginning on page 56.

LIQUIDITY RISK MANAGEMENT

At June 30, 2003, the Corporation and
its principal banks had the following long- and short-term debt ratings:

|                         | Short-Term Debt | Senior Long-Term Debt
|------------------------ | --------------- | ---------------------
|
|The Corporation (parent) |                 | A-1                  
|Principal banks          |                 | A-1                  

MARKET RISK MANAGEMENT



Market risk refers to potential
losses arising from changes in interest rates, foreign exchange rates, equity prices,
commodity prices and credit spreads in market risk sensitive instruments. Market risk
arises in both trading and non-trading portfolios. The section on Market Risk
Management-Nontrading Activities in the Corporations 2002 Annual Report on
pages 61-62 provides an overview of our approach to managing market risks arising from
non-trading portfolios. In these asset and liability management activities, policies are
in place to closely manage structural interest rate risk. Disclosures about the fair value
of financial instruments, which reflect changes in market prices and rates, can be found
in Note 23, Fair Value of Financial Instruments in the Corporations 2002
Annual Report on pages 103-105.

Market Risk Management
 Trading ActivitiesThrough its trading activities, the
Corporation strives to take advantage of profit opportunities due to changes in interest
rates, exchange rates, equity prices, commodity prices and credit spreads. The
Corporations trading activities are primarily customer-oriented. For example, cash
instruments are bought and sold to satisfy customers investment needs. Derivative
contracts are initially entered into to meet the risk management needs of customers. The
Corporation enters into subsequent transactions to manage the level of risk in accordance
with approved limits. In order to accommodate customers, an inventory of capital markets
instruments is carried, and access to market liquidity is maintained by providing
bid-offer prices to other market makers. The Corporation may also take proprietary trading
positions in various capital markets cash instruments and derivatives, and these positions
are designed to profit from anticipated changes in market factors. Activity is focused in
OECD (Organisation for Economic Cooperation and Development) markets, with very little
activity in emerging markets.

Many
trading positions are kept open for brief periods of time, often less than one day. Other
positions may be held for longer periods. Trading positions are carried at estimated fair
value, with realized and unrealized gains and losses included in noninterest income as
trading income.

Value-At-Risk

For
trading portfolios, value-at-risk measures the maximum fair value the Corporation could be
reasonably expected to lose on a trading position, given a specified confidence level and
time horizon. Value-at-risk limits and exposure are monitored daily for each significant
trading portfolio. Value-at-risk is not calculated for credit derivatives used to hedge
specific credits in the loan portfolio. However, stress testing is regularly performed for
these credit derivative positions. See discussion of credit derivatives under the
Trading Derivative Instruments section in the Corporations 2002 Annual
Report on page 72. Likewise, value-at-risk calculations do not include the principal
investments portfolio, which is carried at fair value with realized and unrealized gains
and losses primarily reported in income. However, foreign exchange exposures that arise
from the principal investments portfolio are included in the value-at-risk calculations.

The
Corporation applies a statistical model to its portfolios of cash and derivative
positions, including options, to calculate value-at-risk. The variance-covariance model
estimates the volatility of returns on individual assets, as well as the correlation of
changes of asset price pairs. These volatility and correlation estimates are made on the
basis of one-year, equally-weighted historical observations of market variables. The model
then computes the volatility of changes in the market values of the portfolios (i.e., the
value-at-risk results) by applying each portfolios statistical sensitivities to the
correlations.

The
Corporations value-at-risk calculation measures potential losses in fair value using
a 99% confidence level and a one-day time horizon. This equates to 2.33 standard
deviations from the mean under a normal distribution. This means that, on average, daily
profits and losses are expected to exceed value-at-risk one out of every one hundred
overnight trading days.

28

---

The
value-at-risk in the Corporations trading portfolio was as follows (excluding credit
derivatives used to hedge specific credits in the loan portfolio with a net notional
amount of $5.3 billion and $7.7 billion at June 30, 2003 and March 31, 2003,
respectively):

|                                        |  | Second Quarter 2003
|--------------------------------------- |  | -------------------
|
|High Volume Capital Markets Trading     |  |                    
|Portfolios and Mortgage Pipeline (1)    |  |                    
|Risk type:                              |  |                    
|Interest rate                           |  |                    
|Commodity price                         |  |                    
|Currency exchange rate                  |  |                    
|Equity                                  |  |                    
|Diversification benefit                 |  |                    
|                                        |  |                    
|Total                                   |  |                    
|                                        |  |                    
|Other Trading Portfolios                |  |                    
|Risk type:                              |  |                    
|Interest rate                           |  |                    
|Currency exchange rate                  |  |                    
|                                        |  |                    
|Aggregate trading portfolio market risk |  |                    
|                                       

| | (1) | Subject to backtesting.
| | --- | -----------------------

| | * | Not
previously captured in value-at-risk calculation.
| | - | -----------------------------------------------------

Interest
rate risk was the predominant type of market risk to which the Corporation was exposed
during the second quarter of 2003. At June 30, 2003, approximately 75% of primary market
risk exposures were related to interest rate risk. Currency exchange rate and equity risks
accounted for 20% and 5%, respectively, of primary market risk exposures. Commodity risk
exposure was immaterial.

At
June 30, 2003, aggregate portfolio market risk exposures were 100% higher than at March
31, 2003. Sixty percent of the increase was due to increased aggregate market risk
exposures in trading books that were included in the March 31, 2003 value-at-risk
calculation. Forty percent of the increase was due to the inclusion of foreign exchange
exposures in the principal investments portfolio that had not previously been captured in
the value-at-risk calculation.

Value-at-risk
levels are regularly backtested to validate the model by comparing predictions with actual
results. For the three months ended June 30, 2003, backtesting results for the high volume
capital markets portfolios and the mortgage pipeline appear in the following graph:

Value at Risk Table

29

---

These
backtesting results reflect only the higher-volume trading portfolios that are actively
managed and marked-to-market on a daily basis (i.e., the capital markets trading
portfolios and the mortgage pipeline in the consumer lending business). Based on a 99%
confidence interval in predicting actual profit or loss, the Corporation would expect
actual profit or loss to exceed value-at-risk one day for every one hundred days. As shown
in the graph above, there were no days during the second quarter where the actual loss
exceeded the calculated value-at-risk. The Corporations value-at-risk measure
provides a conservative measure of the level of market risk.

Market Risk Management
 Non-Trading ActivitiesInterest rate risk exposure in the
Corporations core non-trading business activities, (i.e., asset/liability management
(ALM) position), is a result of reprice, option, and basis risks associated
with on- and off-balance sheet positions. Reprice risk represents timing mismatches in the
Corporations ability to alter contractual rates earned on financial assets or paid
on liabilities in response to changes in market interest rates. Basis risk refers to the
potential for change in the underlying relationship between market rates or indices, which
subsequently result in a narrowing of the spread earned on a loan or investment relative
to its cost of funds. Option risk arises from embedded options present in many
financial instruments such as interest rate options, loan prepayment options and deposit
early withdrawal options. These provide customers and investors opportunities to take
advantage of directional changes in rates, which could have an adverse impact on the
Corporations margin performance. Embedded options are complex risk positions that
are difficult to predict and offset, and are a significant component of the interest rate
risk exposure for the Corporation.

Based
on immediate parallel shocks, the Corporations earnings at-risk to falling interest
rates, versus base-case, was relatively unchanged in comparison to the first quarter. The
measured benefit to rising rates has declined. The Corporations 12-month pretax
earnings sensitivity profile was as follows:

|               | Immediate Change in Rates
|-------------- | -------------------------
|
|June 30, 2003  |                          
|              
|March 31, 2003 |                          
|              

The
decrease in measured benefit from rising interest rates reflects managements
decision to position the balance sheet for a more prolonged period of stable rates, while
maintaining a defensive bias against an increase in interest rates. The change in risk was
accomplished by repositioning the investment portfolio and shortening the duration of
certain wholesale liabilities. At June 30, 2003, given the current rate environment, a
100 bp interest rate change could result in negative or near zero interest rates, as
a result the 100 bp change has not been included. At March 31, 2003, a 100 bp
change in rates resulted in a 12-month pretax earnings sensitivity of ($450) million.

CREDIT PORTFOLIO
COMPOSITION

Selected Statistical
Information The significant components of creditrisk and the related ratios for the periods indicated were as follows:

|(Dollars in millions)                       | June 30
2003 | March 31
2003 | December 31
2002 | September 30
2002 | June 30
2002
|------------------------------------------- | ------------ | ------------- | ---------------- | ----------------- | ------------
|Loans outstanding                           |              |               | $                | 144,583           |             
|Average loans                               |              |               |                  | 144,635           |             
|                                            |              |               |                  |                   |             
|Nonperforming loans (1)                     |              |               |                  | 3,062             |             
|Other, including other real estate owned    |              |               |                  | 245               |             
|                                           
|Nonperforming assets                        |              |               |                  | 3,307             |             
|                                            |              |               |                  |                   |             
|Allowance for credit losses                 |              |               |                  | 4,498             |             
|Net charge-offs                             |              |               |                  | 489               |             
|Nonperforming assets to related assets (2)  |              |               |                  | 2.28              | %           
|Allowance to period end loans               |              |               |                  | 3.35              |             
|Allowance to nonperforming loans            |              |               |                  | 147               |             
|Annualized net charge-offs to average loans |              |               |                  | 1.35              |             
|Allowance to annualized net charge-offs     |              |               |                  | 230               |             
|                                           

| | (1) | Includes loans held for sale of $11 million, $22 million, $22 million, $93
               million and $107 million at June 30, 2003, March 31, 2003, December 31, 2002,
               September 30, 2002 and June 30, 2002, respectively. These amounts are not
               included in allowance for credit losses coverage statistics.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | Related assets consist of loans outstanding, including loans held for sale, and
               other real estate owned.
| | --- | -----------------------------------------------------------------------------------------------------------------------

30

---

Loan CompositionThe Corporations loan
portfolios at the periods indicated were as follows:

|                          | June 30, 2003 | March 31, 2003 | December 31, 2002 | September 30, 2002 | June 30, 2002
|------------------------- | ------------- | -------------- | ----------------- | ------------------ | -------------
|
|Retail: (1)               |               |                |                   |                    |              
|Small business commercial |               |                | $                 | 9,775              |              
|Home equity               |               |                |                   | 23,715             |              
|Vehicle                   |               |                |                   | 13,313             |              
|Other personal            |               |                |                   | 6,902              |              
|                         
|Total Retail              |               |                |                   | 53,705             |              
|Commercial Banking:       |               |               
|Corporate banking:        |               |               
|Commercial and industrial |               |                |                   | 15,309             |              
|Commercial real estate    |               |                |                   | 8,228              |              
|Lease financing           |               |                |                   | 4,177              |              
|Other                     |               |                |                   | 1,605              |              
|                         
|Total corporate           |               |               
|banking                   |               |                |                   | 29,319             |              
|Middle market:            |               |               
|Commercial and industrial |               |                |                   | 25,346             |              
|Commercial real estate    |               |                |                   | 2,128              |              
|Lease financing           |               |                |                   | 923                |              
|Other                     |               |                |                   | 59                 |              
|                         
|Total middle market       |               |                |                   | 28,456             |              
|                         
|Total Commercial          |               |               
|Banking                   |               |                |                   | 57,775             |              
|Card Services             |               |                |                   | 14,090             |              
|IMG                       |               |                |                   | 6,842              |              
|Corporate (1)             |               |                |                   | 12,171             |              
|                         
|Total loans               |               |                | $                 | 144,583            |              
|                         

| | (1) | Prior period amounts have been reclassified for the transfer of the non-core
               portfolios from the Retail line of business to the Corporate line of business.
               See page 6 for a discussion of this transfer.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Loans
held for sale, which are classified as loans, are carried at lower of cost or fair value,
totaled $10.2 billion, $7.9 billion, $6.9 billion, $7.9 billion and $5.8 billion at June
30, 2003, March 31, 2003, December 31, 2002, September 30, 2002 and June 30, 2002,
respectively. At June 30, 2003, loans held for sale included Card Services loans of $7.8
billion, Retail loans of $2.1 billion and Commercial Banking loans of $327 million (of
which approximately $6 million were included in nonperforming loans).

31

---

Commercial and
Industrial Loans At June 30, 2003, commercial and
industrial loans totaled $40.7 billion, which represents 70% of the Commercial Banking
portfolio.

The
more significant borrower industry concentrations of the Commercial Banking commercial and
industrial portfolio for the periods indicated were as follows:

|                                      | June 30, 2003 | March 31, 2003 | December 31, 2002
|------------------------------------- | ------------- | -------------- | -----------------
|
|Motor vehicles and parts/auto related |               |                | $                
|Wholesale trade                       |               |                |                  
|Oil and gas                           |               |                |                  
|Industrial materials                  |               |                |                  
|Business finance and leasing          |               |                |                  
|Other (2)                             |               |                |                  
|                                     
|Total                                 |               |                | $                
|                                     

| | (1) | Total outstanding by industry concentration as a percentage of total commercial and
industrial loans.
| | --- | -----------------------------------------------------------------------------------------------------

| | (2) | Presented for informational purposes and includes 36 industry concentrations.
| | --- | -----------------------------------------------------------------------------

32

---

Commercial Real EstateCommercial real estate loans
represent credit extended for real estate related purposes to borrowers or counterparties
who are primarily in the real estate development or investment business and for which the
primary source of repayment of the loan is from the sale, lease, rental, management,
operations or refinancing of the property. At June 30, 2003, commercial real estate loans
totaled $10.4 billion, which represented 18% of the Commercial Banking portfolio.

Commercial
real estate lending is conducted in several lines of business with the majority of these
loans originated by corporate banking primarily through its specialized National
Commercial Real Estate Group. This groups focus is lending to targeted regional and
national real estate developers and homebuilders. As of June 30, 2003, National Commercial
Real Estate Groups loan outstandings totaled $8.1 billion, or 79% of the commercial
real estate portfolio.

The
commercial real estate loan portfolio by both collateral location and property type for
the periods indicated were as follows:

|(Dollars in millions)        | June 30, 2003 | March 31, 2003 | December 31, 2002
|---------------------------- | ------------- | -------------- | -----------------
|
|California                   |               |                | $                
|Michigan                     |               |                |                  
|Illinois                     |               |                |                  
|Texas                        |               |                |                  
|Ohio                         |               |                |                  
|Arizona                      |               |                |                  
|Kentucky                     |               |                |                  
|Louisiana                    |               |                |                  
|Indiana                      |               |                |                  
|Colorado                     |               |                |                  
|Other areas                  |               |                |                  
|Unsecured                    |               |                |                  
|Secured by other than        |               |               
|commercial real estate       |               |                |                  
|                            
|Total commercial real estate |               |                | $                
|                            
|By Property Type:            |               |               
|Apartment                    |               |                | $                
|Retail                       |               |                |                  
|Office                       |               |                |                  
|Industrial/warehouse         |               |                |                  
|Single family residential    |               |               
|development                  |               |                |                  
|Residential lots             |               |                |                  
|Hotels                       |               |                |                  
|Other commercial             |               |               
|income producing             |               |                |                  
|Other residential            |               |               
|developments                 |               |                |                  
|                            
|Total commercial real estate |               |                | $                
|                            

33

---

ASSET QUALITY

Nonperforming AssetsThe Corporation places loans on
nonaccrual status as follows:

- Consumer loans are placed on nonaccrual status when the collection of contractual
principal or interest becomes 90 days past due.
- Commercial loans are placed on nonaccrual status when the collection of contractual
principal or interest is deemed doubtful, or the loan becomes 90 days or more past due and
is not both well-secured and in the process of collection.
- Credit card receivables are charged-off rather than placed on nonaccrual status.

The
Corporations nonperforming assets for the periods indicated were as follows:

|(Dollars in millions)                      | June 30
2003 | March 31
2003 | December 31
2002 | September 30
2002 | June 30
2002
|------------------------------------------ | ------------ | ------------- | ---------------- | ----------------- | ------------
|Nonperforming loans:                       |              |               |                  |                   |             
|Retail (1)                                 |              |               | $                | 570               |             
|Commercial Banking:                        |              |              
|Corporate banking                          |              |               |                  | 705               |             
|Middle market banking                      |              |               |                  | 988               |             
|                                          
|Total Commercial Banking                   |              |               |                  | 1,693             |             
|IMG                                        |              |               |                  | 80                |             
|Corporate (1)                              |              |               |                  | 719               |             
|                                          
|Total nonperforming loans (2)              |              |               |                  | 3,062             |             
|Other, including other real estate owned   |              |               |                  | 245               |             
|                                          
|Total nonperforming assets                 |              |               | $                | 3,307             |             
|                                          
|Nonperforming assets to related assets (3) |              |               |                  | 2.28              | %           
|Loans 90-days or more past due and         |              |              
|accruing interest:                         |              |              
|Card Services                              |              |               | $                | 209               |             
|Other                                      |              |               |                  | -                 |             
|                                          
|Total loans                                |              |               | $                | 209               |             
|                                          

| | (1) | Prior period amounts have been reclassified for the transfer of the non-core
               portfolios from the Retail line of business to the Corporate line of business.
               See page 6 for a discussion of this transfer.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | Nonperforming loans include loans held for sale of $11 million, $22 million, $22
               million, $93 million and $107 million at June 30, 2003, March 31, 2003, December
               31, 2002, September 30, 2002 and June 30, 2002, respectively.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (3) | Related assets consist of loans outstanding, including loans held for sale, and
               other real estate owned.
| | --- | -----------------------------------------------------------------------------------------------------------------------

In
general, credit quality continued to improve during the second quarter as nonperforming
loans declined $137 million from the prior quarter, driven primarily by a $109 million
decline in corporate banking nonperforming loans. The 13% decline in corporate banking was
a result of both an improving economic environment and risk management actions, including
loan sales and management of individual credits, which has led to pay-offs, pay-downs and
restructurings. Middle market nonperforming loans increased 4%, but this increase was not
attributable to any particular industry or segment.

The
Corporation has established processes for identifying potential problem areas of the
portfolio, which currently include commercial exposure to auto-related, airlines and the
risk profile of non-core portfolios. The Corporation will continue to monitor and manage
these potential risks. Concern remains for rising bankruptcy trends and the potential
effect on the consumer portfolios.

Nonperforming
loans within Retail at June 30, 2003 were $570 million, an increase of $12 million from
the prior quarter. This increase was primarily driven by increases in small business
commercial loans, reflecting continued general economic weakness. Overall residential real
estate nonperforming loans continue to improve as foreclosure inventories continue to
decline. Home equity loans are written down to net realizable value once a loan reaches
120 days delinquency. Due to the time necessary to complete foreclosure and acquire title,
real estate loans remain in nonperforming status for an extended period. Corporate line of
business nonperforming loans at June 30, 2003 totaled $719 million and included $712
million of nonperforming loans from the non-core portfolio.

34

---

Charge-offsThe Corporation records charge-offs
as follows:

- Commercial loans are charged-off in the reporting period in which either an event occurs
that confirms the existence of a loss or it is determined that a loan or a portion of a
loan is uncollectible.
- A credit card loan is charged-off in the month it becomes contractually 180 days past due
and remains unpaid at the end of that month, or 60 days after receipt of bankruptcy
notification.
- Consumer loans are generally charged-off following a delinquency period of 120 days, or
within 60 days for unsecured consumer loans after receipt of notification of bankruptcy.
Closed-end consumer loans, such as auto loans and leases and home mortgage loans, are
typically written down to the extent of loss after considering the net realizable value of
the collateral. The timing and amount of the charge-off on consumer loans will depend on
the type of loan, giving consideration to available collateral, as well as the
circumstances giving rise to the delinquency. The Corporation adheres to uniform
guidelines published by the FFIEC in charging off consumer loans.

The
Corporations net charge-offs for the quarterly periods indicated were as follows:

|                      | June 30, 2003 | March 31, 2003 | December 31, 2002
|--------------------- | ------------- | -------------- | -----------------
|
|Retail (1)            |               |                | $                
|Commercial Banking:   |               |               
|Corporate banking     |               |                |                  
|Middle market banking |               |                |                  
|                     
|Total Commercial      |               |                |                  
|Banking               |               |                |                  
|Card Services         |               |                |                  
|IMG                   |               |                |                  
|Corporate (1)         |               |                |                  
|                     
|Total                 |               |                | $                
|                     

|                      |  | September 30, 2002 | June 30, 2002
|--------------------- |  | ------------------ | -------------
|
|Retail (1)            |  |                    |              
|Commercial Banking:   |  |                   
|Corporate banking     |  |                    |              
|Middle market banking |  |                    |              
|                     
|Total Commercial      |  |                    |              
|Banking               |  |                    |              
|Card Services         |  |                    |              
|IMG                   |  |                    |              
|Corporate (1)         |  |                    |              
|                     
|Total                 |  |                    |              
|                     

| | (1) | Prior period amounts have been reclassified for the transfer of the non-core
               portfolios from the Retail line of business to the Corporate line of business.
               See page 6 for a discussion of this transfer.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Net
charge-offs decreased 1% during the second quarter of 2003 to $489 million. The net
charge-off ratio remained unchanged at 1.35% in the second quarter of 2003 from the first
quarter of 2003.

Retail
net charge-offs in the second quarter of 2003 totaled $113 million, up from $102 million
in the first quarter of 2003. This increase reflected higher net charge-offs primarily in
tax-refund anticipation and small business loans.

Commercial
Banking net charge-offs in the second quarter of 2003 totaled $105 million, down from $128
million in the first quarter of 2003, reflecting continued benefits from managements
actions taken during 2001 and 2002. Continuing efforts to effectively control, manage and
underwrite risk in a consistent and disciplined manner led to the improvements in credit
quality. The net charge-off ratio was 0.72%, down from 0.85%, resulting from improvements
in both corporate banking gross charge-offs and higher than normal middle market
recoveries. In spite of this improvement, future charge-offs and credit quality in the
Commercial Banking portfolio are subject to uncertainties that

35

---

may cause actual results to
differ from historical experience or forecasted results, including the state of the
economy and its impact on individual industries and portfolio mix, among other things.

On
a reported basis, Card Services net charge-offs for the second quarter of 2003 totaled
$182 million, an increase of $21 million from the first quarter, primarily resulting from
growth of the portfolio from $12.4 billion to $14.1 billion.

Net
charge-offs of the non-core portfolio totaled $83 million in the second quarter of 2003
compared to $102 million in the first quarter.

On
a managed basis, Card Services second quarter 2003 net charge-off ratio of 5.21% decreased
from the previous quarter ratio of 5.29%, reflecting managements continued emphasis
on prudent credit risk management including disciplined underwriting and account
management practices targeted to the prime and super-prime credit sectors. Credit risk
management tools used to manage the level and volatility of losses for credit card
accounts have been continually updated, and, where appropriate, these tools are adjusted
to reduce credit risk. The managed credit card portfolio continued to reflect a
well-seasoned portfolio that has good national geographic diversification.

Future
charge-offs and overall credit quality are subject to uncertainties, which may cause
actual results to differ from current and historic performance. This could include the
direction and level of loan delinquencies, changes in consumer behavior, bankruptcy
trends, portfolio seasoning, interest rate movements, regulatory requirements and
portfolio mix, among other things. While current economic and credit data suggests that
credit quality will not significantly deteriorate, significant deterioration in the
general economy could materially change these expectations.

Loan SalesA summary of the Corporations
Commercial Banking loan sales, excluding trading, syndications, syndication-related
activity and trade finance transactions, for the quarters indicated were as follows:

|(In millions)                                  | June 30
2003 | March 31
2003 | December 31
2002 | September 30
2002 | June 30
2002
|---------------------------------------------- | ------------ | ------------- | ---------------- | ----------------- | ------------
|Loans sold and loans transferred               |              |               |                  |                   |             
|to loans held for sale: (1)                    |              |              
|Nonperforming loans                            |              |               | $                | 28                |             
|Other loans with credit related losses         |              |               |                  | 217               |             
|Other loans                                    |              |               |                  | 41                |             
|                                              
|Total                                          |              |               | $                | 286               |             
|                                              
|Impact of sales, transfers to loans held       |              |              
|for sale and valuation adjustments             |              |              
|on held for sale:                              |              |              
|Charge-offs on loans sold and                  |              |              
|transferred to held for sale:                  |              |              
|Nonperforming loans                            |              |               | $                | 1                 |             
|Other loans with credit related losses         |              |               |                  | 21                |             
|                                              
|Total charge-offs to allowance                 |              |               |                  | 22                |             
|Losses (gains) on loans sold and held for sale |              |               |                  | (14               | )           
|                                              
|Total                                          |              |               | $                | 8                 |             
|                                              

| | (1) | Prior
periods have been restated to conform to the current presentation.
| | --- | ------------------------------------------------------------------------

The
Corporation sells Commercial Banking loans in the normal course of its business activities
and as one alternative to manage credit risk. These loans are subject to the
Corporations overall risk management practices. When a loan is sold or transferred
to held for sale, any loss is evaluated to determine whether it resulted from credit
deterioration or other conditions. Based upon this evaluation, losses resulting from
credit deterioration are recorded as charge-offs. Losses on loan sales deemed to be from
other than credit deterioration, gains on loan sales, and subsequent fair value
adjustments on loans held for sale are reported as other noninterest income.

Loans
classified as held for sale are carried at the lower of cost or market value. Accordingly,
these loans are no longer included in the evaluation of the adequacy of the allowance for
credit losses.

36

---

ALLOWANCE FOR CREDIT
LOSSES

The allowance for credit losses is
maintained at a level that in managements judgment is adequate to provide for
estimated probable credit losses inherent in various on- and off-balance sheet financial
instruments. This process includes deriving probable loss estimates based on historical
loss ratios, portfolio stress testing and managements judgment.

The
changes in the Corporations allowance for credit losses for the quarters indicated
were as follows:

|(In millions)                | June 30
2003 | March 31
2003 | December 31
2002 | September 30
2002 | June 30
2002
|---------------------------- | ------------ | ------------- | ---------------- | ----------------- | ------------
|Balance, beginning of period |              |               | $                | 4,526             |             
|Charge-offs:                 |              |              
|Retail: (1)                  |              |              
|Small business commercial    |              |               |                  | 21                |             
|Home equity                  |              |               |                  | 32                |             
|Vehicle                      |              |               |                  | 62                |             
|Other personal               |              |               |                  | 28                |             
|                            
|Total Retail                 |              |               |                  | 143               |             
|                            
|Commercial Banking:          |              |              
|Corporate banking:           |              |              
|Commercial and industrial    |              |               |                  | 75                |             
|Commercial real estate       |              |               |                  | 3                 |             
|Lease financing              |              |               |                  | 4                 |             
|                            
|Total corporate banking      |              |               |                  | 82                |             
|Middle market:               |              |              
|Commercial and industrial    |              |               |                  | 78                |             
|Commercial real estate       |              |               |                  | 3                 |             
|Lease financing              |              |               |                  | 2                 |             
|                            
|Total middle market          |              |               |                  | 83                |             
|                            
|Total Commercial Banking     |              |               |                  | 165               |             
|Card Services                |              |               |                  | 208               |             
|IMG                          |              |               |                  | 8                 |             
|Corporate (1)                |              |               |                  | 94                |             
|                            
|Total charge-offs            |              |               |                  | 618               |             
|                            

| | (1) | Prior period amounts have been reclassified for the transfer of the non-core
               portfolios from the Retail line of business to the Corporate line of business.
               See page 6 for a discussion of this transfer.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

37

---

Allowance for Credit Losses table
continued:

|(In millions)               | June 30
2003 | March 31
2003 | December 31
2002 | September 30
2002 | June 30
2002
|--------------------------- | ------------ | ------------- | ---------------- | ----------------- | ------------
|Recoveries:                 |              |               |                  |                   |             
|Retail: (1)                 |              |              
|Small business commercial   |              |               | $                | 5                 |             
|Home equity                 |              |               |                  | 5                 |             
|Vehicle                     |              |               |                  | 16                |             
|Other personal              |              |               |                  | 4                 |             
|                           
|Total Retail                |              |               |                  | 30                |             
|                           
|Commercial Banking:         |              |              
|Corporate banking:          |              |              
|Commercial and industrial   |              |               |                  | 17                |             
|Commercial real estate      |              |               |                  | 1                 |             
|Lease financing             |              |               |                  | 1                 |             
|                           
|Total corporate banking     |              |               |                  | 19                |             
|Middle market:              |              |              
|Commercial and industrial   |              |               |                  | 39                |             
|Commercial real estate      |              |               |                  | 1                 |             
|Lease financing             |              |               |                  | 1                 |             
|                           
|Total middle market         |              |               |                  | 41                |             
|                           
|Total Commercial Banking    |              |               |                  | 60                |             
|Card Services               |              |               |                  | 26                |             
|IMG                         |              |               |                  | 2                 |             
|Corporate (1)               |              |               |                  | 11                |             
|                           
|Total recoveries            |              |               |                  | 129               |             
|                           
|Net charge-offs:            |              |              
|Retail (1)                  |              |               |                  | 113               |             
|Commercial Banking          |              |               |                  | 105               |             
|Card Services               |              |               |                  | 182               |             
|IMG                         |              |               |                  | 6                 |             
|Corporate (1)               |              |               |                  | 83                |             
|                           
|Total net charge-offs       |              |               |                  | 489               |             
|                           
|Provision for credit losses |              |               |                  | 461               |             
|Transfers                   |              |               |                  | -                 |             
|                           
|Balance, end of period      |              |               | $                | 4,498             |             
|                           

| | (1) | Prior period amounts have been reclassified for the transfer of the non-core
               portfolios from the Retail line of business to the Corporate line of business. See page 6 for a discussion of this transfer.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

38

---

Composition of Allowance
for Credit LossesWhile the allowance for credit losses
is available to absorb credit losses in the entire portfolio, allocations of the allowance
for credit losses by line of business as of the dates indicated were as follows:

|                         | June 30, 2003 | March 31, 2003 | December 31, 2002 | September 30, 2002 | June 30, 2002
|------------------------ | ------------- | -------------- | ----------------- | ------------------ | -------------
|
|Retail (1)               |               |                | $                 | 688                |              
|Commercial Banking:      |               |               
|Corporate banking        |               |                |                   | 1,611              |              
|Middle market            |               |                |                   | 1,365              |              
|                        
|Total Commercial Banking |               |                |                   | 2,976              |              
|Card Services            |               |                |                   | 396                |              
|IMG                      |               |                |                   | 40                 |              
|Corporate (1)            |               |                |                   | 398                |              
|                        
|Total composition        |               |                | $                 | 4,498              |              
|                        

| | (1) | Prior
period amounts have been reclassified for the transfer of the non-core
               portfolios from the Retail line of business to the Corporate line of
business.                See page 6 for a discussion of this transfer.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Components of Allowance
for Credit LossesThe Corporation determines allowance
for credit losses levels based upon the probable losses in the credit portfolios. Several
methodologies are employed for estimating probable losses. A detailed discussion of the
process is presented in the Corporations 2002 Annual Report beginning on page 57.

The
table below presents the components of the probable loss estimate as of the dates
indicated:

|(In millions)        | June 30
2003 | March 31
2003 | December 31
2002 | September 30
2002 | June 30
2002
|-------------------- | ------------ | ------------- | ---------------- | ----------------- | ------------
|Asset specific       |              |               | $                | 591               |             
|Expected loss        |              |               |                  | 2,713             |             
|Stress               |              |               |                  | 1,194             |             
|                    
|Total components (1) |              |               | $                | 4,498             |             
|                    

| | (1) | The underlying assumptions, estimates and assessments made by management to
               determine the components of the allowance for credit losses are
continually                evaluated by management and updated to reflect managements
judgments                regarding economic conditions and various relevant factors
impacting credit                quality and inherent losses.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The
June 30, 2003 allowance for credit losses remained relatively unchanged; however, due to
decreases in nonperforming loans and asset levels, coverage ratios improved. The allowance
for credit losses at June 30, 2003 represented 3.35% of period-end loans and 147% of
nonperforming loans, compared to 3.20% and 139%, respectively, at December 31, 2002. The
asset-specific and expected loss components of the allowance for credit losses decreased
from the prior quarter reflecting overall credit quality improvement in the Commercial
loan portfolio. This was offset by an increase in the stress component of the allowance
for credit losses reflecting managements ongoing assessment of the probable losses
inherent in the portfolio. The allowance for credit losses established for specifically
identified off-balance sheet lending exposures was not material at June 30, 2003.

39

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DERIVATIVE FINANCIAL
INSTRUMENTS

In the normal course of business, the
Corporation uses a variety of derivative financial instruments in its trading activity,
asset and liability management, to a lesser extent in its mortgage operations, and to
manage certain currency translation exposures of foreign entities. These instruments
include interest rate, currency, equity and commodity swaps, forwards, spot, futures,
options, caps, floors, forward rate agreements, credit derivatives and other conditional
or exchange contracts, and include both exchange-traded and over-the-counter contracts. A
detailed discussion of accounting policies for trading and hedging derivative instruments
is presented in the Corporations 2002 Annual Report beginning on page 72.

Trading Derivative
InstrumentsDerivative financial instruments used
in trading include swaps, forwards, futures, options, and other conditional or exchange
contracts in the interest rate, foreign exchange, credit, equity and commodity markets.
The estimated fair values are based on quoted market prices or valuation models using
current market information. Realized and unrealized gains and losses, including any
interest income or expense on derivative instruments, are recorded in noninterest income
as trading.

The
Corporation also uses credit derivatives (primarily single name credit default swaps) and
short bond positions, as protection against the deterioration of credit quality on
commercial loans and loan commitments. The change in fair value of credit derivative
instruments is included in trading results in the Corporations financial statements,
while any credit assessment change in the underlying credit exposure is reflected in the
allocated credit reserves. At June 30, 2003, the net notional amount of credit derivatives
economically hedging commercial credit exposure totaled $5.3 billion, and the related
trading loss was $143 million for the second quarter of 2003.

Asset and Liability
Management Hedging Derivative InstrumentsDerivatives are an integral component
of the Corporations asset/liability management activities and associated management
of interest rate risk. In general, the assets and liabilities generated through the
ordinary course of business activities do not naturally create offsetting positions with
respect to repricing, basis or maturity characteristics. Using derivative instruments,
principally plain vanilla interest rate swaps (ALM swaps), interest rate sensitivity is
adjusted to maintain the desired interest rate risk profile.

Cash Flow HedgesCash flow hedges primarily represent
hedges of variable rate interest-bearing instruments. The effective portion of the change
in fair value of the hedging derivative is recorded in Accumulated Other Adjustments to
Stockholders Equity, which is reclassified into earnings in a manner consistent with
the earnings pattern of the underlying hedged instrument or transaction. At June 30, 2003,
the projected total amount of such reclassification into earnings over the next twelve
months would be a decrease in net income of $319 million after-tax ($501 million pre-tax).
This decrease, along with the contractual interest on the underlying variable rate debt,
achieves the overall intended result of converting the variable rate to a specified fixed
rate and is included in the Corporations analysis of interest rate exposure. These
projections involve the use of currently forecasted interest rates over the next twelve
months. These rates, and the resulting classification into earnings, are subject to
change. The maximum length of time for which exposure to the variability of future cash
flows for forecasted transactions is hedged is 21 months. No events have occurred in 2003
that impacted earnings from the discontinuance of cash flow hedges due to the
determination that a forecasted transaction is no longer likely to occur.

The
amount of hedge ineffectiveness recognized for cash flow and fair value hedges for the six
months ended June 30, 2003 was a loss of $2 million recognized in noninterest income. No
component of a hedging derivative instruments gain or loss is excluded from the
assessment of hedge effectiveness. The Corporation has no non-derivative instruments
designated as hedges.

Credit Exposure
Resulting from Derivative Financial InstrumentsCredit exposure from derivative
financial instruments arises from the risk of a counterparty default on the derivative
contract. The amount of loss created by the default is the replacement cost or current
fair value of the defaulted contract. The Corporation utilizes master netting agreements
whenever possible to reduce its credit exposure from counterparty defaults. These
agreements allow the netting of contracts with unrealized losses against contracts with
unrealized gains to the same counterparty, in the event of a counterparty default.

40

---

The
impact of these master netting agreements for the periods indicated was as follows:

|(In millions)                  | June 30
2003 | March 31
2003 | December 31
2002 | September 30
2002 | June 30
2002
|------------------------------ | ------------ | ------------- | ---------------- | ----------------- | ------------
|Gross replacement cost         |              |               | $                | 27,967            |             
|Less: Adjustment due to master |              |              
|netting agreements             |              |               |                  | 22,624            |             
|                              
|Balance sheet credit exposure  |              |               | $                | 5,343             |             
|                              

The credit
risk associated with exchange-traded derivative financial instruments is limited to the
relevant clearinghouse. Written options do not expose the Corporation to credit risk,
except to the extent of the underlying risk in a financial instrument that the Corporation
may be obligated to acquire under certain written put options. Written caps and floors do
not expose the Corporation to credit risk.

LOAN SECURITIZATIONS AND
OFF-BALANCE SHEET ACTIVITIES

Loan SecuritizationsInvestors in the beneficial interests
of the securitized loans have no recourse against the Corporation if cash flows generated
from the securitized loans are inadequate to service the obligations of the qualified
special purpose entity (QSPE) that issues the securitized loans. To help
ensure that adequate funds are available in the event of a shortfall, the Corporation is
required to deposit funds into cash spread accounts if the excess spread falls below
certain minimum levels. Spread accounts are funded from excess spread that would normally
be returned to the Corporation. In addition, various forms of other credit enhancements
are provided to protect more senior investor interests from loss. Credit enhancements
associated with credit card securitizations, such as cash collateral or spread accounts,
totaled $43 million and $145 million at June 30, 2003 and December 31, 2002,
respectively, and are classified on the balance sheet as other assets at amounts
approximating fair value.

The
following comprised the Corporations managed credit card loans for the periods
indicated:

|(In millions)                                                          | June 30
2003 | December 31
2002
|---------------------------------------------------------------------- | ------------ | ----------------
|Owned credit card loans - held in portfolio                            |              |                 
|Owned credit card loans - held for sale                                |              |                 
|Seller's interest in credit card loans and accrued interest receivable |              |                 
|                                                                      
|Total credit card receivables reflected on balance sheet               |              |                 
|Securities sold to investors and removed from balance sheet            |              |                 
|                                                                      
|Managed credit card loans                                              |              |                 
|                                                                      

For
further discussion of the Corporations loan securitization process and other related
disclosures, see pages 74-77 and 94-95 of the Corporations 2002 Annual Report.

Off-Balance Sheet
ActivitiesIn the normal course of business, the
Corporation is a party to a number of activities that contain credit, market and
operational risk that are not reflected in whole or in part in the Corporations
consolidated financial statements. Such activities include: traditional off-balance sheet
credit-related financial instruments; commitments under capital and operating leases and
long-term debt; credit enhancement and liquidity facilities associated with the commercial
paper conduit programs; joint venture activities; and other contractual obligations.

41

---

Credit-Related Financial
InstrumentsThe Corporation provides customers
with off-balance sheet credit support through loan commitments, standby letters of credit
and guarantees, as well as commercial letters of credit. Summarized credit-related
financial instruments at June 30, 2003 were as follows:

|                                                        | Amount of Commitment Expiration Per Period
|------------------------------------------------------- | ------------------------------------------
|
|Unused credit card lines                                |                                           
|Unused loan commitments                                 |                                           
|Standby letters of credit and foreign office guarantees |                                           
|Commercial letters of credit                            |                                           
|                                                       

Since
many of the unused commitments are expected to expire unused or be only partially used,
the total amount of unused commitments in the preceding table does not necessarily
represent future cash requirements.

Lease Commitments,
Long-Term Debt and OtherThe Corporation has entered into a
number of long-term leasing arrangements of banking facilities to support the ongoing
activities of the Corporation. The required payments under such commitments and long-term
debt at June 30, 2003 were as follows:

|(In millions)                            | 2003 | 2004 | 2005 | 2006  | 2007 | 2008
and After | Total
|---------------------------------------- | ---- | ---- | ---- | ----- | ---- | -------------- | -----
|Long-term debt, including capital leases |      |      | $    | 3,438 |      | $              | 6,546
|Trust preferred capital securities       |      |      |      | -     |      |                | -    
|Operating leases                         |      |      |      | 103   |      |                | 226  
|                                        
|Total                                    |      |      | $    | 3,541 |      | $              | 6,772
|                                        

Asset-Backed Finance
ProgramsThe Corporation is an active
participant in the asset-backed securities business where it helps meet customers
financing needs by providing access to the commercial paper markets through special
purpose entities, known as multi-seller conduits. These entities are separate
bankruptcy-remote corporations in the business of purchasing interests in, and making
loans secured by, receivables pools and other financial assets pursuant to agreements with
customers. The multi-seller conduits fund their purchases and loans through the issuance
of highly rated commercial paper. The primary source of repayment of the commercial paper
is the cash flow from the pools of assets. Investors in the commercial paper have no
recourse to the general assets of the Corporation. Customers benefit from such structured
financing transactions as these transactions provide an ongoing source of asset liquidity,
access to the capital markets, and a potentially favorable cost of financing.

As
of June 30, 2003, the Corporation administered multi-seller conduits with a total program
limit of $70.0 billion and with $34.3 billion in commercial paper outstanding. The
multi-seller conduits were rated at least A-1 by S&P, P-1 by Moodys and F-1 by
Fitch.

These
multi-seller conduits are a type of variable interest entity (VIE), as defined
by Financial Accounting Standards Board (FASB) Interpretation No. 46,
Consolidation of Variable Interest Entities (FIN No. 46). These
entities historically have met all of the requirements to be accounted for as independent
entities, and, prior to the issuance of FIN No. 46, were not required to be consolidated
with the Corporation. See pages 51-52 for additional discussion. Each of the multi-seller
conduits administered by the Corporation prepares stand-alone financial statements, which
are independently audited on an annual basis.

As
administrator of the multi-seller conduits, the Corporation provides deal origination
services, asset portfolio monitoring, treasury and financial administration services for
these entities. The Corporation structures financing transactions for customers such that
the receivables and other financial instruments financed through the multi-seller conduits
are appropriately diversified and credit enhanced to support the conduits commercial
paper issuances. As of the date hereof, the Corporation does not service these assets and
does not transfer receivables originated by the Corporation into the multi-seller conduits
it administers. Each conduit has program documents and investment policies, which govern
the types of assets and structures permitted by the conduit. Three of the multi-seller
conduits principally purchase interests in, or make loans secured by, trade receivables,
auto loans and leases and credit card receivables. One conduit makes loans secured by
portfolios of publicly rated marketable investment securities.

42

---

The
commercial paper issued by the conduits is supported by deal specific credit enhancement,
which is structured to cover more than the expected losses on the pool of assets. The deal
specific credit enhancement is typically in the form of over-collateralization, but may
also include any combination of the following: recourse to the seller or originator, cash
collateral accounts, letters of credit, excess spread, retention of subordinated interests
or third-party guarantees. In a limited number of cases, the Corporation provides the deal
specific credit enhancements as a financial arrangement for the customer. As of June 30,
2003 and December 31, 2002, the Corporation provided such deal specific enhancements to
customers in the form of subordinated interests totaling $152 million and $203 million,
respectively. These subordinated interest positions were included in loans on the
Corporations balance sheets as of June 30, 2003 and December 31, 2002.

For
three of the multi-seller conduits, the commercial paper investors have access to a second
loss credit protection in the form of program-wide credit enhancement. The program-wide
credit enhancement consists of a subordinated term loan from the Corporation and a surety
bond from an AAA rated monoline insurance company. The subordinated term loans from the
Corporation to these conduits totaled $1.0 billion as of June 30, 2003 and December 31,
2002, respectively. One conduit has only deal specific credit enhancements provided by
other financial institutions.

As
a means of ensuring timely repayment of the commercial paper, each asset pool financed by
the conduits has a minimum of 100% deal specific liquidity facility associated with it. In
the unlikely event of a disruption in the commercial paper market or in the event an asset
pool is removed from the conduit, the administrator may draw on the liquidity facility to
repay the maturing commercial paper. The liquidity facilities are typically in the form of
asset purchase agreements and are generally structured such that the bank liquidity is
provided by purchasing, or lending against, a pool of non-defaulted, performing assets.
Additionally, program-wide liquidity facilities and lines of credit are provided by the
Corporation and other financial institutions to the multi-seller conduits to facilitate
access to the commercial paper markets.

The
following table summarizes the total amount of deal specific and program-wide liquidity
facilities, as well as the share of these facilities provided by the Corporation, of the
multi-seller conduits for the periods indicated:

|                            | June 30, 2003 | December 31, 2002
|--------------------------- | ------------- | -----------------
|
|Total multi-seller conduits |               |                  
|                           

The
Corporation also provides deal specific and program-wide liquidity facilities to conduits
administered by other financial institutions totaling approximately $7.3 billion as of
June 30, 2003.

With
the implementation of FIN No. 46, the multi-seller conduits administered by the
Corporation and an investment vehicle administered by the Corporation were required to be
consolidated with the Corporation effective July 1, 2003. Investors in the consolidated
multi-seller conduits and the investment vehicle have no recourse to the general assets of
the Corporation.

Effective
July 1, 2003, the Corporation consolidated $38.0 billion of the incremental assets and
liabilities related to its asset-backed conduit business as a result of implementing FIN
46. This is not expected to have a material impact to Tier 1 Capital and Total Capital.
These assets and liabilities will appear in the Commercial Banking line of business upon
consolidation. Management has estimated its maximum loss exposure to be $129 million.

Principal Investments
and Joint VenturesIn the normal course of business, the
Corporation invests in principal investments, comprised of direct and indirect investments
in private equity, venture capital and other equity and debt assets. The investment
strategy for the portfolio, primarily executed by One Equity Partners (a wholly-owned
consolidated subsidiary), is to focus on direct investments in high potential entities.
Investments made include interests in Howaldtswerke-Deutsche Werft (HDW), the global
leader in the design and manufacture of non-nuclear submarines, and in Polaroid, a leader
in the instant imaging industry. Commitments to fund such investments at June 30, 2003
totaled $1.0 billion.

At
June 30, 2003, the Corporation was not party to any material joint venture arrangements
which were not consolidated.

43

---

Loans Sold with RecourseThe Corporation occasionally sells or
securitizes loans with limited recourse. The amount of outstanding loans sold with
recourse totaled $3.5 billion and $4.7 billion at June 30, 2003 and December 31, 2002,
respectively. The recourse provisions require the Corporation to repurchase loans at par
plus accrued interest upon a credit-related triggering event. Exposure to credit losses
from these arrangements has been reduced with the purchase of credit insurance contracts
that cover the majority of expected losses.

CAPITAL MANAGEMENT

The capital position of the
Corporation is managed to achieve managements external debt rating objectives,
comply with regulatory requirements and reflect the underlying risks of the
Corporations business activities. The Corporation employs an economic capital
framework (described further on page 45) to facilitate a standard measure of risk and
return across all business units, as well as to provide a measure of capital adequacy
consistent with internal risk evaluation practices. This serves as the basis for capital
planning and related management activities.

Selected Capital RatiosThe Corporation aims to maintain
regulatory capital ratios, including those of the principal banking subsidiaries, in
excess of the well-capitalized guidelines under federal banking regulations. The
Corporation maintains a well-capitalized regulatory position.

The Corporations capital ratios
were as follows:

|                                | June 30
2003 | March 31
2003 | December 31
2002 | September 30
2002 | June 30
2002 | Well-Capitalized
Regulatory
Guidelines
|------------------------------- | ------------ | ------------- | ---------------- | ----------------- | ------------ | --------------------------------------
|Risk-based capital ratios:      |              |               |                  |                   |              |                                       
|Tier 1                          |              |               |                  | 9.7               | %            |                                       
|Total                           |              |               |                  | 13.6              |              |                                       
|Leverage ratio (1)              |              |               |                  | 8.7               |              |                                       
|Common equity/assets            |              |               |                  | 7.4               |              |                                       
|Tangible common equity/tangible |              |              
|reported assets                 |              |               |                  | 6.6               |              |                                       
|Tangible common equity/tangible |              |              
|managed assets                  |              |               |                  | 5.9               |              |                                       
|Double leverage ratio           |              |               |                  | 106               |              |                                       
|Dividend payout ratio           |              |               |                  | 29                |              |                                       
|                               

(1)    
          The minimum regulatory guideline is 3%.

44

---

The
components of the Corporations regulatory risk-based capital and risk-weighted
assets were as follows:

|(In millions)                  | June 30
2003 | March 31
2003 | December 31
2002 | September 30
2002 | June 30
2002
|------------------------------ | ------------ | ------------- | ---------------- | ----------------- | ------------
|Regulatory risk-based capital: |              |               |                  |                   |             
|Tier 1 capital                 |              |               | $                | 23,721            |             
|Tier 2 capital                 |              |               |                  | 9,316             |             
|                              
|Total capital                  |              |               |                  | 33,037            |             
|                              
|Total risk-weighted assets     |              |               | $                | 243,779           |             
|                              

In
deriving Tier 1 and Total Capital, goodwill and other nonqualifying intangible assets were
deducted for the periods indicated:

|(In millions)                   | June 30
2003 | March 31
2003 | December 31
2002 | September 30
2002 | June 30
2002
|------------------------------- | ------------ | ------------- | ---------------- | ----------------- | ------------
|Goodwill                        |              |               | $                | 1,893             |             
|Other nonqualifying intangibles |              |               |                  | 303               |             
|                               
|Subtotal                        |              |               |                  | 2,196             |             
|Qualifying intangibles          |              |               |                  | 474               |             
|                               
|Total intangibles               |              |               | $                | 2,670             |             
|                               

See
page 43 for a discussion of the impact of consolidation of certain multi-seller conduits
to the Corporations risk-based capital ratios under FIN No. 46.

Dividend Policy
The Corporations common stock
dividend policy reflects its earnings outlook, desired payout ratios, the need to maintain
an adequate capital level and alternative investment opportunities. The common stock
dividend payout ratio is targeted in the range of 25% 30% of earnings over
time. On April 15, 2003, the Corporation declared its quarterly common cash dividend of
$0.21 per share, payable on July 1, 2003. The quarterly cash dividend on outstanding
common stock was increased 19%, or $0.04 per share, to $0.25 per share, payable October 1,
2003, to shareholders of record on September 12, 2003.

Double LeverageDouble leverage is the extent to
which the Corporations resources are used to finance investments in subsidiaries.
Double leverage was 106% and 103% at June 30, 2003 and December 31, 2002, respectively.
Trust Preferred Capital Securities of $3.3 billion at June 30, 2003 and December 31,
2002 were included in capital for purposes of this calculation.

Stock Repurchase ProgramOn July 16, 2003, a new $3.0 billion
stock buyback program was approved and replaced amounts unused under the previous $2.0
billion program. The timing of the purchases and the exact number of shares to be
purchased will depend on market conditions. The buyback program does not include specific
price targets or timetables and may be suspended at any time. In the second quarter 2003,
the Corporation purchased more than 19 million shares of common stock at an average price
of $37.12 per share pursuant to the previous buyback program. For the first six
months of 2003, the Corporation purchased more than 39 million shares of common stock at
an average price of $36.41 per share.

Economic CapitalAn important aspect of risk
management and performance measurement is the ability to evaluate the risk and return of a
business unit, product or customer consistently across all lines of business. The
Corporations economic capital framework facilitates this standard measure of risk
and return. Business units are assigned capital consistent with the underlying risks of
their product set, customer base and delivery channels.

The following principles are inherent
in the capital allocation methodology employed:

- An equal amount of capital is assigned
for each measured unit of risk.
- Risk is defined in terms of unexpected losses over the life of the exposure,
measured at a confidence interval consistent with that level of capitalization necessary
to achieve a targeted AA solvency standard. Unexpected losses are in excess of those
normally incurred and for which reserves are maintained.
- Business units are assessed a uniform charge against allotted capital, representing a
target hurdle rate on equity investments. Returns on capital in excess of the hurdle rate
contribute to increases in shareholder value.

45

---

FORWARD-LOOKING STATEMENTS

Managements Discussion and
Analysis included herein contains certain forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. In addition, the Corporation may
make or approve certain statements in future filings with the Securities and Exchange
Commission (the Commission), in press releases, and in oral and written
statements made by or with the Corporations approval that are not statements of
historical fact and may constitute forward-looking statements. Forward-looking statements
may relate to, without limitation, the Corporations financial condition, results of
operations, plans, objectives, future performance or business.

Words
such as believes, anticipates, expects,
intends, plans, estimates, targeted and
similar expressions are intended to identify forward-looking statements but are not the
only means to identify these statements.

Forward-looking
statements involve risks and uncertainties. Actual conditions, events or results may
differ materially from those contemplated by a forward-looking statement. Factors that
could cause this differencemany of which are beyond the Corporations
controlinclude the following, without limitation:

- Local, regional and international business or economic conditions may differ from those expected.
- The effects of and changes in trade, monetary and fiscal policies and laws, including the Federal Reserve
Boards interest rate policies, may adversely affect the Corporations business.
- The timely development and acceptance of new products and services may be different than anticipated.
- Technological changes instituted by the Corporation and by persons who may affect the Corporations
business may be more difficult to accomplish or more expensive than anticipated or may have unforeseen
consequences.
- Acquisitions and integration of acquired businesses may be more difficult
or expensive than expected.
- The ability to increase market share and control expenses
may be more difficult than anticipated.
- Competitive pressures among financial services
companies may increase significantly.
- Changes in laws and regulations (including laws
and regulations concerning taxes, banking, securities and insurance) may adversely affect the Corporation or its business.
- Changes in accounting policies and practices, as may be adopted by regulatory agencies,
the Public Company Accounting Oversight Board and the Financial Accounting Standards
Board, may affect expected financial reporting.
- The costs, effects and outcomes of
litigation may adversely affect the Corporation or its business.
- The Corporation may not
manage the risks involved in the foregoing as well as anticipated.

Forward-looking
statements speak only as of the date they are made. The Corporation undertakes no
obligation to update any forward-looking statement to reflect subsequent circumstances or
events.

46

---

# CONSOLIDATED BALANCE
SHEETS Bank One Corporation and
Subsidiaries

|(Dollars in millions)                                                   | June 30
2003 | December 31
2002 | June 30
2002
|----------------------------------------------------------------------- | ------------ | ---------------- | ------------
|Assets                                                                  |              |                  |             
|Cash and due from banks                                                 |              |                  | $           
|Interest-bearing due from banks                                         |              |                  |             
|Federal funds sold and securities purchased under resale agreements     |              |                  |             
|Trading assets                                                          |              |                  |             
|Derivative product assets                                               |              |                  |             
|Investment securities                                                   |              |                  |             
|Loans (1)                                                               |              |                  |             
|Allowance for credit losses                                             |              |                  |             
|                                                                       
|Loans, net                                                              |              |                  |             
|Other assets                                                            |              |                  |             
|                                                                       
|Total assets                                                            |              |                  | $           
|                                                                       
|                                                                        |              |                 
|Liabilities                                                             |              |                 
|Deposits:                                                               |              |                 
|Demand                                                                  |              |                  | $           
|Savings                                                                 |              |                  |             
|Time:                                                                   |              |                 
|Under $100,000                                                          |              |                  |             
|$100,000 and over                                                       |              |                  |             
|Foreign offices                                                         |              |                  |             
|                                                                       
|Total deposits                                                          |              |                  |             
|Federal funds purchased and securities sold under repurchase agreements |              |                  |             
|Other short-term borrowings                                             |              |                  |             
|Long-term debt                                                          |              |                  |             
|Guaranteed preferred beneficial interest in the Corporation's           |              |                 
|junior subordinated debt                                                |              |                  |             
|Derivative product liabilities                                          |              |                  |             
|Other liabilities                                                       |              |                  |             
|                                                                       
|Total liabilities                                                       |              |                  |             
|                                                                        |              |                 
|Stockholders' Equity                                                    |              |                 
|Common stock ($0.01 par value; authorized 4,000,000,000;                |              |                 
|issued 1,181,382,304)                                                   |              |                  |             
|Surplus                                                                 |              |                  |             
|Retained earnings                                                       |              |                  |             
|Accumulated other adjustments to stockholders' equity                   |              |                  |             
|Deferred compensation                                                   |              |                  |             
|Treasury stock, at cost (51,032,621, 17,340,948 and 7,843,692           |              |                 
|shares, respectively)                                                   |              |                  |             
|                                                                       
|Total stockholders' equity                                              |              |                  |             
|                                                                       
|Total liabilities and stockholders' equity                              |              |                  | $           
|                                                                       

| | (1) | Includes loans held for sale of $10.2 billion, $6.9 billion and $5.8 billion at
               June 30, 2003, December 31, 2002 and June 30, 2002, respectively.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------

The accompanying notes are an
integral part of this statement.

47

---

# CONSOLIDATED INCOME
STATEMENTSBank One Corporation
and Subsidiaries

|                                                       | Three Months Ended June 30 | Six Months Ended June 30
|------------------------------------------------------ | -------------------------- | ------------------------
|
|Net Interest Income:                                   |                            |                         
|Interest income                                        |                            |                         
|Interest expense                                       |                            |                         
|                                                       |                            |                         
|Total net interest income                              |                            |                         
|                                                       |                            |                         
|                                                       |                            |                         
|Noninterest Income:                                    |                            |                         
|Banking fees and commissions                           |                            |                         
|Credit card revenue                                    |                            |                         
|Service charges on deposits                            |                            |                         
|Fiduciary and investment management fees               |                            |                         
|Investment securities gains                            |                            |                         
|Trading gains (losses)                                 |                            |                         
|Other income                                           |                            |                         
|                                                       |                            |                         
|Total noninterest income                               |                            |                         
|                                                       |                            |                         
|Total revenue, net of interest expense                 |                            |                         
|                                                       |                            |                         
|Provision for credit losses                            |                            |                         
|                                                       |                            |                         
|Noninterest Expense:                                   |                            |                         
|Salaries and employee benefits                         |                            |                         
|Occupancy                                              |                            |                         
|Equipment                                              |                            |                         
|Outside service fees and processing                    |                            |                         
|Marketing and development                              |                            |                         
|Telecommunication                                      |                            |                         
|Intangible amortization                                |                            |                         
|Other expense                                          |                            |                         
|                                                       |                            |                         
|Total noninterest expense before                       |                            |                         
|restructuring-related charges (reversals)              |                            |                         
|Restructuring-related charges (reversals)              |                            |                         
|                                                       |                            |                         
|Total noninterest expense                              |                            |                         
|                                                       |                            |                         
|Income before income taxes                             |                            |                         
|Applicable income taxes                                |                            |                         
|                                                       |                            |                         
|Net income                                             |                            |                         
|                                                       |                            |                         
|Net income attributable to common stockholders' equity |                            |                         
|                                                       |                            |                         
|                                                       |                            |                         
|Earnings per share:                                    |                            |                         
|Basic                                                  |                            |                         
|Diluted                                                |                            |                         

The accompanying notes are an
integral part of this statement.

48

---

# CONSOLIDATED
STATEMENTS OF STOCKHOLDERS EQUITYBank One Corporation
and Subsidiaries

|(In millions)                        | Common
Stock | Surplus | Retained
Earnings | Accumulated
Other
Adjustments to
Stockholders'
Equity | Deferred
Compensation | Treasury
Stock | Total
Stockholders'
Equity
|------------------------------------ | ------------ | ------- | ----------------- | ----------------------------------------------------- | --------------------- | -------------- | --------------------------
|Balance-December 31, 2001            |              |         | $                 | 12                                                    |                       | $              | 10,311                    
|                                    
|Net income                           |              |         |                   |                                                       |                       |                |                           
|Change in fair value, investment     |              |        
|securities-available for sale,       |              |        
|net of taxes                         |              |         |                   |                                                       |                       |                |                           
|Change in fair value of cash flow    |              |        
|hedge derivatives,                   |              |        
|net of taxes                         |              |         |                   |                                                       |                       |                |                           
|Translation loss,                    |              |        
|net of hedge results and taxes       |              |         |                   |                                                       |                       |                |                           
|Net income and changes in            |              |        
|accumulated other adjustments        |              |        
|to stockholders' equity              |              |         |                   |                                                       |                       |                |                           
|Common stock cash dividends declared |              |         |                   |                                                       |                       |                |                           
|Net issuance of common stock         |              |         |                   |                                                       |                       |                | (151                      
|Restricted stock awards granted,     |              |        
|net of forfeitures and amortization  |              |         |                   |                                                       |                       |                |                           
|Other                                |              |         |                   |                                                       |                       |                | 17                        
|                                    
|Balance-June 30, 2002                |              |         | $                 | 12                                                    |                       | $              | 10,177                    
|                                    
|Balance-December 31, 2002            |              |         | $                 | 12                                                    |                       | $              | 10,239                    
|                                    
|Net income                           |              |         |                   |                                                       |                       |                |                           
|Change in fair value, investment     |              |        
|securities-available for sale,       |              |        
|net of taxes                         |              |         |                   |                                                       |                       |                |                           
|Change in fair value of cash-flow    |              |        
|hedge derivatives,                   |              |        
|net of taxes                         |              |         |                   |                                                       |                       |                |                           
|Minimum pension liability            |              |         |                   |                                                       |                       |                |                           
|Translation gain,                    |              |        
|net of hedge results and taxes       |              |         |                   |                                                       |                       |                |                           
|Net income and changes in            |              |        
|accumulated other adjustments        |              |        
|to stockholders' equity              |              |         |                   |                                                       |                       |                |                           
|Common stock cash dividends declared |              |         |                   |                                                       |                       |                |                           
|Net purchases of common stock        |              |         |                   |                                                       |                       |                | (27                       
|Restricted stock awards granted,     |              |        
|net of forfeitures and amortization  |              |         |                   |                                                       |                       |                |                           
|Stock option grants                  |              |         |                   |                                                       |                       |                | 29                        
|Other                                |              |         |                   |                                                       |                       |                | (1                        
|                                    
|Balance-June 30, 2003                |              |         | $                 | 12                                                    |                       | $              | 10,240                    
|                                    

The
accompanying notes are an integral part of this statement.

49

---

# CONSOLIDATED
STATEMENTS OF CASH FLOWSBank One Corporation
and Subsidiaries

|                                                                         | Six Months Ended June 30
|------------------------------------------------------------------------ | ------------------------
|
|Cash Flows from Operating Activities:                                    |                         
|Net income                                                               |                         
|Adjustments to reconcile net income to net cash                          |                         
|provided by operating activities:                                        |                         
|Depreciation and amortization                                            |                         
|Provision for credit losses                                              |                         
|Investment securities (gains), net                                       |                         
|Net (increase) decrease in net derivative product assets and liabilities |                         
|Net (increase) in trading assets                                         |                         
|Net (increase) in other assets                                           |                         
|Net increase in other liabilities                                        |                         
|Restructuring (reversals)                                                |                         
|All other operating adjustments, net                                     |                         
|                                                                         |                         
|Net cash provided by operating activities                                |                         
|                                                                         |                         
|Cash Flows from Investing Activities:                                    |                         
|Net increase in federal funds sold and                                   |                         
|securities under resale agreements                                       |                         
|Securities available for sale:                                           |                         
|Purchases                                                                |                         
|Maturities                                                               |                         
|Sales                                                                    |                         
|Credit card receivables securitized                                      |                         
|Net (increase) decrease in loans                                         |                         
|Loan recoveries                                                          |                         
|Additions to premises and equipment                                      |                         
|Proceeds from sales of premises and equipment                            |                         
|All other investing activities, net                                      |                         
|                                                                         |                         
|Net cash (used in) provided by investing activities                      |                         
|                                                                         |                         
|Cash Flows from Financing Activities:                                    |                         
|Net increase (decrease) in deposits                                      |                         
|Net increase in federal funds purchased and                              |                         
|securities sold under repurchase agreements                              |                         
|Net increase (decrease) in other short-term borrowings                   |                         
|Proceeds from issuance of long-term debt                                 |                         
|Repayment of long-term debt                                              |                         
|Repurchase of treasury stock                                             |                         
|Cash dividends paid                                                      |                         
|Proceeds from issuance of common and treasury stock                      |                         
|All other financing activities, net                                      |                         
|                                                                         |                         
|Net cash provided by (used in) financing activities                      |                         
|Effect of exchange rate changes on cash and cash equivalents             |                         
|                                                                         |                         
|Net increase in cash and cash equivalents                                |                         
|Cash and cash equivalents at beginning of period                         |                         
|                                                                         |                         
|Cash and cash equivalents at end of period                               |                         
|                                                                         |                         

The accompanying notes are an
integral part of this statement.

50

---

# NOTES TO CONSOLIDATED
FINANCIAL STATEMENTSBank One Corporation
and Subsidiaries

Note 1Summary of
Significant Accounting PoliciesThe consolidated financial statements
of the Corporation have been prepared in conformity with accounting principles generally
accepted in the United States of America. Certain prior-period financial statement
information has been reclassified to conform to the current quarter presentation. The
preparation of the consolidated financial statements requires management to make estimates
and assumptions that affect the amounts reported and disclosures of contingent assets and
liabilities. Actual results could differ from those estimates.

Certain
assets and liabilities, primarily derivative assets and liabilities as well as resale and
repurchase agreements, are reported on a net basis by counterparty if legally enforceable
master netting arrangements are in place.

Although
the interim amounts are unaudited, they do reflect all adjustments that, in the opinion of
management, are necessary for a fair presentation of the results of operations for the
interim periods. All such adjustments are of a normal, recurring nature. Because the
results from commercial banking operations are so closely related and responsive to
changes in economic conditions, fiscal policy and monetary policy, and because the results
for the investment securities and trading portfolios are largely market-driven, the
results for any interim period are not necessarily indicative of the results that can be
expected for the entire year.

These
financial statements should be read in conjunction with the consolidated financial
statements and related notes included in the Corporations 2002 Annual Report.

Note 2New
Accounting PronouncementsCosts Associated with Exit or Disposal ActivitiesIn 2002, the Financial Accounting
Standards Board (FASB) issued Statement of Financial Accounting Standard
(SFAS) No. 146, Accounting for Costs Associated with Exit or Disposal
Activities (SFAS No. 146), which supercedes Emerging Issues Task Force
No. 94-3, Liability Recognition for Certain Employee Termination Benefits and Other
Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring).
SFAS No. 146 requires that a liability for costs associated with an exit or disposal
activity be recognized when the liability is incurred rather than when a company commits
to such an activity and also establishes fair value as the objective for initial
measurement of the liability. SFAS No. 146 is effective for exit or disposal activities
that are initiated after December 31, 2002. The impact of adoption was not material to the
Corporations results of operations, financial position or cash flows.

Accounting and
Disclosure Requirements for GuaranteesIn 2002, the FASB issued
Interpretation No. 45, Guarantors Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees of Indebtedness of Others (FIN No.
45), which requires additional disclosures by a guarantor about its obligations
under certain guarantees that it has issued. FIN No. 45 also clarifies that a guarantor is
required to recognize, at the inception of a guarantee, a liability for the fair value of
the obligation undertaken in issuing the guarantee. The most significant instruments
impacted for the Corporation are financial and performance standby letters of credit. The
required FIN No. 45 disclosure has been incorporated into Note 12, Financial
Guarantees. The accounting requirements of FIN No. 45 became effective for the
Corporation on January 1, 2003, on a prospective basis. The impact of adoption was not
material to the Corporations results of operations, financial position or cash
flows.

Consolidation of
Variable Interest Entities (VIE)In 2003, the FASB issued
Interpretation No. 46, Consolidation of Variable Interest Entities (FIN
No. 46), which provides new accounting guidance on when to consolidate a VIE. A VIE
exists when either the total equity investment at risk is not sufficient to permit the
entity to finance its activities by itself, or the equity investors lack one of three
characteristics associated with owning a controlling financial interest. Those
characteristics are the direct or indirect ability to make decisions about an
entitys activities through voting rights or similar rights, the obligation to absorb
the expected losses of an entity if they occur, and the right to receive the expected
residual returns of the entity if they occur.

FIN
No. 46 was effective immediately for new entities that were created or acquired after
January 31, 2003, and became effective on July 1, 2003 for entities in which the
Corporation had a variable interest prior to February 1, 2003. The Corporation adopted FIN
No. 46 on a prospective basis and, accordingly, will not restate prior periods. FIN No. 46

51

---

affects the Corporations accounting and reporting for certain VIEs in which the
Corporation holds one or more variable interests.

The
Corporations retained interests in its credit card securitizations and its
investments in commercial mortgage-backed securities are exempt from the requirements of
FIN No. 46.

As
discussed on pages 42-43, the Corporation is an active participant in the asset-backed
securities business where it helps to meet customers financing needs by providing
access to the commercial paper markets through special purpose entities, known as
multi-seller conduits. These multi-seller conduits are a type of VIE, as defined by FIN
No. 46. These entities historically have met the requirements to be treated as independent
entities, and, prior to the issuance of FIN No. 46, were not required to be consolidated
with the Corporation. With the implementation of FIN No. 46, the multi-seller conduits
administered by the Corporation and an investment vehicle were required to be consolidated
with the Corporation effective July 1, 2003. Investors in the consolidated multi-seller
conduits and the investment vehicle have no recourse to the Corporation.

Effective
July 1, 2003, the Corporation consolidated $38.0 billion of the incremental assets and
liabilities related to its asset-backed conduit business as a result of implementing FIN
46. This is not expected to have a material impact to Tier 1 Capital and Total Capital.
These assets and liabilities will appear in the Commercial Banking line of business upon
consolidation. Management has estimated its maximum loss exposure to be $129 million.

Derivative Instruments
and Hedging ActivitiesIn April 2003, FASB issued SFAS No.
149, Amendment of Statement 133 on Derivative Instruments and Hedging
Activities. This Statement amends and clarifies financial accounting and reporting
for derivative instruments, including certain derivative instruments embedded in other
contracts and for hedging activities under FASB Statement No. 133, Accounting for
Derivative Instruments and Hedging Activities. The Corporation adopted SFAS No. 149
on July 1, 2003. This adoption had an immaterial impact on the Corporations
operating results and financial position.

Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and EquityIn May 2003, FASB issued SFAS No.
150, Accounting for Certain Financial Instruments with Characteristics of Both
Liabilities and Equity. This statement modifies the accounting for certain financial
instruments with characteristics of both liabilities and equity.

The
Corporation adopted SFAS No. 150 and FIN No. 46 effective July 1, 2003. Previously,
guaranteed preferred beneficial interests in the Corporations junior subordinated
debt were classified as a separate liability, with distributions on these securities
included in interest expense on long-term debt. Under SFAS No. 150 and FIN No. 46,
guaranteed preferred beneficial interest will be included as a component of long-term
debt, with no change in the reporting of distributions.

Note 3AcquisitionOn May 30, 2003, the Corporation
announced an agreement to acquire, for approximately $500 million in cash, key business
components of Zurich Life, a U.S. life and annuity operation of Zurich Financial Services
Group. The transaction is expected to close in the third quarter of 2003, pending
regulatory approvals.

Zurich
Life, based in Schaumburg, Illinois, is a leading underwriter of term life insurance
serving consumers through both a national network of 40,000 licensed brokers/insurance
agents and the direct marketing platform of its Zurich Direct agency. It is also a
significant underwriter of fixed and variable annuities, with a recognized expertise in
the teachers annuity market. It underwrites universal life and participates in the
business-owned life insurance market. Zurich Life has regulatory and operating insurance
authority in all 50 states.

Zurich
Life is comprised of Federal Kemper Life Assurance Company, Kemper Investors Life
Insurance Company, Zurich Life Insurance Company of America, Zurich Life Insurance Company
of New York and their subsidiaries. In addition, Federal Kemper Life Assurance Company
provides management services to Fidelity Life Association, a Mutual Legal Reserve Company.

52

---

Note 4Earnings per
ShareBasic EPS is computed by dividing
income available to common stockholders by the average number of common shares outstanding
for the period. Except when the effect would be antidilutive, the diluted EPS calculation
includes shares that could be issued under outstanding stock options and the employee
stock purchase plan.

|                                                                      | Three Months Ended June 30 | Six Months Ended June 30
|--------------------------------------------------------------------- | -------------------------- | ------------------------
|
|Net income available to common stockholders for basic and diluted EPS |                            |                         
|                                                                      |                            |                         
|Average shares outstanding                                            |                            |                         
|Stock options                                                         |                            |                         
|                                                                      |                            |                         
|Average shares outstanding assuming full dilution                     |                            |                         
|                                                                      |                            |                         
|Earnings per share:                                                   |                            |                         
|Basic                                                                 |                            |                         
|Diluted                                                               |                            |                         
|                                                                      |                            |                         

Note
5Restructuring-Related Activity Actions
under the fourth quarter 2001 and the second quarter 2000 restructuring plans have been
completed with only payments of identified obligations remaining, which consist primarily
of lease obligations. Unpaid amounts at June 30, 2003 totaled $77 million and $37 million
for these plans, respectively. These amounts will be paid as required over the remaining
contractual obligation periods.

53

---

Note 6Business
SegmentsThe information below is consistent
with the content of business segment data provided to the Corporations management,
which does not use product group revenues to assess consolidated results. Aside from
investment management and insurance products, product offerings are tailored to specific
customer segments. As a result, the aggregation of product revenues and related profit
measures across lines of business is not available.

Aside
from the United States of America, no single country or geographic region generates a
significant portion of the Corporations revenues or assets. In addition, there are
no single customer concentrations of revenue or profitability.

For
additional disclosures regarding the Corporations segments see the Business
Segment Results section beginning on page 6.

The
following table summarizes certain financial information by line of business for the
periods indicated:

|                      | Three Months Ended June 30 | June 30
|--------------------- | -------------------------- | -------
|
|
|Retail (2)            |                            |        
|Commercial Banking    |                            |        
|Card Services         |                            |        
|Investment Management |                            |        
|Corporate (2)         |                            |        
|                     
|Total                 |                            |        
|                     

|                      | Six Months Ended June 30 | 
|--------------------- | ------------------------ | 
|
|
|Retail (2)            |                          | 
|Commercial Banking    |                          | 
|Card Services         |                          | 
|Investment Management |                          | 
|Corporate (2)         |                          | 
|                     
|Total                 |                          | 
|                     

| | (1) | Total revenue-FTE and provision for (benefit of) income taxes include tax
               equivalent adjustments of $39 million and $36 million for three months ended
               June 30, 2003 and 2002, respectively. For the six months ended June 30,
               2003 and 2002, tax equivalent adjustments were $76 million and $71 million,
               respectively.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | Prior period amounts have been reclassified for the transfer of the non-core
               portfolios from the Retail line of business to the Corporate line of business.
               See page 6 for a discussion of this transfer.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

54

---

Note 7Interest
Income and Interest ExpenseDetails of interest income and
interest expense were as follows:

|                                                                        | Three Months Ended June 30 | Six Months Ended June 30
|----------------------------------------------------------------------- | -------------------------- | ------------------------
|
|Interest Income:                                                        |                            |                         
|Loans, including fees                                                   |                            |                         
|Bank balances                                                           |                            |                         
|Federal funds sold and securities purchased under resale agreements     |                            |                         
|Trading assets                                                          |                            |                         
|Investment securities                                                   |                            |                         
|                                                                        |                            |                         
|Total interest income                                                   |                            |                         
|                                                                        |                            |                         
|Interest Expense:                                                       |                            |                         
|Deposits                                                                |                            |                         
|Federal funds purchased and securities sold under repurchase agreements |                            |                         
|Other short-term borrowings                                             |                            |                         
|Long-term debt                                                          |                            |                         
|                                                                        |                            |                         
|Total interest expense                                                  |                            |                         
|                                                                        |                            |                         
|Net interest income                                                     |                            |                         
|Provision for credit losses                                             |                            |                         
|                                                                        |                            |                         
|Net interest income after provision for credit losses                   |                            |                         
|                                                                        |                            |                         

55

---

Note 8Investment
SecuritiesThe summary of the Corporations
investment portfolio follows:

|                                                     | At June 30, 2003
|---------------------------------------------------- | ----------------
|
|U.S. Treasury                                        |                 
|U.S. government agencies                             |                 
|States and political subdivisions                    |                 
|Interests in credit card securitized receivables (1) |                 
|Other debt securities                                |                 
|Equity securities (1)                                |                 
|                                                    
|Total available for sale securities                  |                 
|                                                    
|Principal and other investments (2)                  |                 
|                                                     |                 
|Total investment securities                          |                 
|                                                    

|                                                     | At December 31, 2002
|---------------------------------------------------- | --------------------
|
|U.S. Treasury                                        |                     
|U.S. government agencies                             |                     
|States and political subdivisions                    |                     
|Interests in credit card securitized receivables (1) |                     
|Other debt securities                                |                     
|Equity securities (1)                                |                     
|                                                    
|Total available for sale securities                  |                     
|                                                    
|Principal and other investments (2)                  |                     
|                                                     |                     
|Total investment securities                          |                     
|                                                    

|                                                     | At June 30, 2002
|---------------------------------------------------- | ----------------
|
|U.S. Treasury                                        |                 
|U.S. government agencies                             |                 
|States and political subdivisions                    |                 
|Interests in credit card securitized receivables (1) |                 
|Other debt securities                                |                 
|Equity securities (1)                                |                 
|                                                    
|Total available for sale securities                  |                 
|                                                    
|Principal and other investments (2)                  |                 
|                                                     |                 
|Total investment securities                          |                 
|                                                    

| | (1) | The
fair values of certain securities for which market quotations were not
          available were estimated.
| | --- | --------------------------------------------------------------------------------------------------------------

| | (2) | The
fair values of certain securities reflect           liquidity and other market-related
factors, and include investments accounted for at fair value consistent with specialized
industry practice.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

For
the three months ended June 30, 2003, gross recognized gains and losses on
available-for-sale investment securities were $106 million and $12 million,
respectively. For the three months ended June 30, 2002, gross recognized gains and losses
on available-for-sale investment securities were $375 million and $177 million,
respectively.

For
the six months ended June 30, 2003, gross recognized gains and losses on
available-for-sale investment securities were $198 million and $44 million,
respectively. For the six months ended June 30, 2002, gross recognized gains and losses on
available-for-sale investment securities were $466 million and $231 million, respectively.

56

---

Note 9Guaranteed
Preferred Beneficial Interest in the Corporations Junior Subordinated DebtThe Corporation has sponsored ten
trusts with a total aggregate issuance outstanding of $3.3 billion at June 30, 2003
in trust preferred securities as follows:



|                                                 | Trust Preferred | Junior Subordinated Debt Owned by Trust
|------------------------------------------------ | --------------- | ---------------------------------------
|
|Capital VI                                       |                 |                                        
|Capital V                                        |                 |                                        
|Capital IV                                       |                 |                                        
|                                                 |                 |                                        
|Capital III                                      |                 |                                        
|Capital II                                       |                 |                                        
|Capital I                                        |                 |                                        
|First Chicago  NBD Capital 1                     |                 |                                        
|                                                 |                 |                                        
|First USA  Capital Trust I (2)                   |                 |                                        
|First Chicago  NBD Institutional       Capital A |                 |                                        
|First Chicago                                    |                 |                                        
|NBD Institutional                                |                 |                                        
|Capital B                                        |                 |                                        
|                                                 |                 |                                        

| | (1) | Redeemable
at any time subject to approval by the Federal Reserve Board.
| | --- | ------------------------------------------------------------------------

| | (2) | The
Corporation paid a premium of $36 million to repurchase           $193 million
of these securities in 1997.
| | --- | ---------------------------------------------------------------------------------------------------------------

These
trust preferred securities are tax-advantaged issues that qualify for Tier 1 capital
treatment. Distributions on these securities are included in interest expense on long-term
debt. Each of the trusts is a statutory business trust organized for the sole purpose of
issuing trust securities and investing the proceeds thereof in junior subordinated
debentures of the Corporation, the sole asset of each trust. The preferred trust
securities of each trust represent preferred beneficial interests in the assets of the
respective trusts and are subject to mandatory redemption upon payment of the junior
subordinated debentures held by the trust. The common securities of each trust are
wholly-owned by the Corporation. Each trusts ability to pay amounts due on the trust
preferred securities is solely dependent upon the Corporation making payment on the
related junior subordinated debentures. The Corporations obligations under the
junior subordinated securities and other relevant trust agreements, in aggregate,
constitute a full and unconditional guarantee by the Corporation of each respective
trusts obligations under the trust securities issued by such trust.

57

---

Note 10Supplemental
Disclosures for Accumulated Other Adjustments to Stockholders EquityAccumulated
other adjustments to stockholders equity were as follows:

|                                                                        | Six Months Ended June 30
|----------------------------------------------------------------------- | ------------------------
|
|Fair value adjustment on investment securities-available for sale:      |                         
|Balance, beginning of period                                            |                         
|Change in fair value, net of taxes of $23 and $202 for the              |                         
|six months ended June 30, 2003 and 2002, respectively                   |                         
|Reclassification adjustment, net of tax benefits of $55 and $86 for the |                         
|six months ended June 30, 2003 and 2002, respectively                   |                         
|                                                                       
|Balance, end of period                                                  |                         
|                                                                        |                         
|Fair value adjustment on derivative instruments-cash flow type hedges:  |                         
|Balance, beginning of period                                            |                         
|Net change in fair value associated with current period hedging         |                         
|activities, net of  tax benefits of $111 and $148 for the six           |                         
|months ended June 30, 2003 and 2002, respectively                       |                         
|Reclassification into earnings, net of taxes of $99 and $87 for         |                         
|the six months ended June 30, 2003 and 2002, respectively               |                         
|                                                                       
|Balance, end of period                                                  |                         
|                                                                        |                         
|Accumulated translation adjustment:                                     |                         
|Balance, beginning of period                                            |                         
|Translation gain (loss), net of hedge results and taxes                 |                         
|                                                                       
|Balance, end of period                                                  |                         
|                                                                       
|Minimum pension liability:                                              |                         
|Balance, beginning of period                                            |                         
|Minimum pension liability (loss), net of taxes                          |                         
|                                                                       
|Balance, end of period                                                  |                         
|                                                                       
|Total accumulated other adjustments to stockholders' equity             |                         
|                                                                       

58

---

Note 11Stock-Based
CompensationThe Corporation utilizes stock-based
awards, including restricted shares and stock options, as part of its overall compensation
program. In addition, the Corporation provides employees the opportunity to purchase its
shares through an Employee Stock Purchase Plan.

Effective
January 1, 2002, the Corporation adopted the fair value recognition provisions of SFAS No.
123, Accounting for Stock-Based Compensation (SFAS No. 123), as
amended by SFAS No. 148, Accounting for Stock-Based Compensation-Transition and
Disclosure, an amendment to FASB Statement No. 123 (SFAS No. 148), and
selected the prospective method of transition and began recognizing compensation expense
based on the fair value method on newly granted stock awards. Under this method,
compensation cost is measured at the grant date based on the fair value of the award and
is recognized as expense over the vesting period of the grant. Pursuant to the
requirements of SFAS No. 123, as amended by SFAS No. 148, options granted prior to January
1, 2002, continue to be accounted for under APB Opinion No. 25, Accounting for Stock
Issued to Employees (APB No. 25). Under APB No. 25, no compensation
expense is recognized when the exercise price is greater than or equal to the market price
of the underlying common stock on the date of grant.

Awards
under the Corporations stock compensation plans vest over periods ranging primarily
from three to five years. Therefore, the expense related to stock option compensation
included in the determination of net income for 2003 and 2002 was less than that which
would have been recognized if the fair value method had been applied to all awards since
the original effective date of SFAS No. 123. The net income and earnings per share
implications if the fair value method had been applied to all awards vesting during the
three and six months ended June 30, 2003 and 2002 would have been as follows:

|                                                                 | Three Months Ended June 30 | Six Months Ended June 30
|---------------------------------------------------------------- | -------------------------- | ------------------------
|
|Net income attributable to common stockholders' equity           |                            |                         
|Add:  Stock-based employee compensation expense                  |                            |                         
|included in reported net income, net of related tax effects      |                            |                         
|Deduct:  Total stock-based employee compensation expense         |                            |                         
|determined under the fair value method for all awards            |                            |                         
|vesting during the period, net of related tax effects            |                            |                         
|                                                                
|Pro forma net income attributable to common stockholders' equity |                            |                         
|Earnings per share:                                              |                            |                         
|Basic - as reported                                              |                            |                         
|Basic - pro forma                                                |                            |                         
|                                                                 |                            |                         
|Diluted - as reported                                            |                            |                         
|Diluted - pro forma                                              |                            |                         
|                                                                

Other
disclosures related to stock options have not materially changed from the disclosure
provided in Note 19, Stock-Based Compensation of the Corporations 2002
Annual Report on pages 100-101.

59

---

Note 12-Financial
GuaranteesIn the normal course of business, the
Corporation is a party to financial instruments containing credit and/or market risks.
These financial instruments are primarily credit-related instruments. The Corporation has
risk management policies to identify, monitor and limit exposure to credit, liquidity and
market risks. To mitigate credit risk for financial guarantees, the Corporation generally
determines the need for specific covenant, guarantee and collateral requirements on a
case-by-case basis, depending on the nature of the financial instrument and the
customers creditworthiness.

The
following is a summary of financial instruments that are considered guarantees in
accordance with FIN No. 45:

|                                  | June 30, 2003 | December 31, 2002
|--------------------------------- | ------------- | -----------------
|
|Standby letters of credit and     |               |                  
|foreign office guarantees (1) (2) |               |                  
|Loans sold with recourse          |               |                  
|Swap guarantees                   |               |                  
|Asset purchase agreements (4)     |               |                  
|                                 

| | (1) | The
contract amount of financial standby letters of credit and foreign office
                    guarantees and performance standby letters of credit and foreign
guarantees                     totaled $22.1 billion and $4.1 billion and $20.4 billion
and $3.6 billion at                     June 30, 2003 and December 31, 2002,
respectively.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | Includes
$8.5 billion and $7.1 billion at June 30, 2003 and December 31, 2002,
                    respectively, participated to other institutions.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------

| | (3) | The
carrying value of financial guarantees includes amounts deferred and
                    recognized in income over the life of the contract and amounts for
inherent                     losses in accordance with FASB Statement No. 5, Accounting
for                     Contingencies (SFAS No. 5). These amounts are
generally                     reported in other liabilities except the SFAS No. 5
component related to standby                     letters of credit that is reported in
the allowance for credit losses.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (4) | Certain
asset purchase agreements entered into in conjunction with the
                    Corporations asset-backed conduit program qualify as financial
guarantees                     under this new accounting guidance due to the specific
structure of certain of                     these agreements. For additional discussion
of the asset purchase agreements and                     the related off-balance sheet
exposure, see page 42.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

For
a discussion of these types of agreements, see Financial Guarantees in the
Corporations 2002 Annual Report on page 103.

The
Corporation also sells put options that are considered a form of financial guarantee when
the counterparties that purchase the contracts actually own the reference financial
instrument (generally loans, commodities and equities). A put option sold by the
Corporation provides the counterparty the right to sell (i.e., put) the
reference asset to the Corporation at a pre-determined price.

The
following table summarizes the Corporation inventory of sold put options as of June 30,
2003, in which it was probable that the counterparty owns the reference financial
instrument:

|(In millions) | Contract
Amount | Carrying
Value
|------------- | --------------- | --------------
|Loans         |                 |               
|Commodities   |                 |               
|Equities      |                 |               
|             

60

---

Note 13Collateral
Policy Related to Certain Asset Transfer ActivityThe maximum outstanding amount of
securities under resale agreements at June 30, 2003 and 2002 was $15.4 billion and
$8.1 billion, respectively. The average outstanding amount of securities under resale
agreements during the quarters ended June 30, 2003 and 2002 was $9.5 billion and $6.2
billion, respectively.

Note 14Contingent
LiabilitiesThe Corporation and certain of its
subsidiaries have been named as defendants in various legal proceedings, including certain
class actions, arising out of the normal course of business or operations. In certain of
these proceedings, which are based on alleged violations of consumer protection,
securities, banking, insurance and other laws, rules or principles, substantial money
damages may be asserted against the Corporation and its subsidiaries. Since the
Corporation and certain of its subsidiaries, which are regulated by one or more federal
and state regulatory authorities, are the subject of numerous examinations and reviews by
such authorities, the Corporation also is and will be, from time to time, normally engaged
in various disagreements with regulators, related primarily to its financial services
businesses. The Corporation also receives tax deficiency assessments from various taxing
jurisdictions.

In
view of the inherent difficulty of predicting the outcome of such matters, the Corporation
cannot state what the eventual outcome of pending matters will be; however, based on
current knowledge and after consultation with counsel, management does not believe that
liabilities arising from these matters, if any, will have a material adverse effect on the
consolidated financial position or results of operations of the Corporation.

Note 15Subsequent
EventOn July 24, 2003, the Corporation
announced an agreement to sell the Corporate Trust Services business, part of the
Investment Management line of business. The sale price is $720 million, of which
approximately 10% is contingent upon business retention. The sale includes the corporate,
municipal, structured finance and escrow businesses as well as the document custody and
London corporate trust operations. The closing of the transaction, pending regulatory
approvals, is expected to occur later this year.

61

---

# SELECTED STATISTICAL
INFORMATIONBank One Corporation and
Subsidiaries

# Average Balances/Net
Interest Margin/Rates

|                                       | Three Months Ended
|-------------------------------------- | ------------------
|
|
|Assets                                 |                   
|Short-term investments                 |                   
|Trading assets (1)                     |                   
|Investment securities: (1)             |                   
|U.S. government and federal agency     |                   
|States and political subdivisions      |                   
|Other                                  |                   
|                                      
|Total investment securities            |                   
|Loans (1) (2)                          |                   
|                                      
|Total earning assets                   |                   
|Allowance for credit losses            |                   
|Other assets - nonearning              |                   
|                                      
|Total assets                           |                   
|                                      
|Liabilities and Stockholders' Equity   |                   
|Interest-bearing deposits: (3)         |                   
|Savings                                |                   
|Money market                           |                   
|Time                                   |                   
|Foreign offices (4)                    |                   
|                                      
|Total deposits - interest-bearing      |                   
|Federal funds purchased and securities |                   
|under repurchase agreements            |                   
|Other short-term borrowings            |                   
|Long-term debt (5)                     |                   
|                                      
|Total interest-bearing liabilities     |                   
|                                      
|Noninterest-bearing deposits           |                   
|Other liabilities                      |                   
|Preferred stock                        |                   
|Common stockholders' equity            |                   
|                                      
|Total liabilities and equity           |                   
|                                      
|Interest income/earning assets         |                   
|Interest expense/earning assets        |                   
|                                      
|Net interest income/margin             |                   
|                                      

| | (1) | Includes tax-equivalent adjustments based on federal income tax rate of 35%.
| | --- | ----------------------------------------------------------------------------

| | (2) | Nonperforming loans are included in average balances used to determine average
               rate.
| | --- | ---------------------------------------------------------------------------------------------------

| | (3) | On a consolidated basis, demand deposit balances are routinely swept overnight
               into money market deposits. On a line of business basis, balances are presented
               without the impact of sweeps. Certain prior period data has been adjusted to
               conform with current period presentation.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (4) | Includes international banking facilities deposit balances in domestic
               offices and balances of Edge Act and overseas offices.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------

| | (5) | Includes trust preferred capital securities.
| | --- | --------------------------------------------

62

---

# SELECTED STATISTICAL
INFORMATIONBank One Corporation and
Subsidiaries

# Average Balances/Net
Interest Margin/Rates

|Three Months Ended
|------------------
|
|
|                  
|$                 
|                  
|                  
|                  
|                  
|                  
|                  
|                  
|                  
|                  
|                  
|                  
|                  
|                  
|$                 
|                  
|                  
|                  
|$                 
|                  
|                  
|                  
|                  
|                  
|                  
|                  
|                  
|                  
|                  
|                  
|                  
|                  
|                  
|                  
|                  
|                  
|$                 
|                  
|                  
|                  
|                  
|                  
|                  

For footnote detail see page 62.

63

---

# SELECTED STATISTICAL
INFORMATIONBank One Corporation and Subsidiaries

# Average Balances/Net
Interest Margin/Rates

|                                       | Six Months Ended June 30
|-------------------------------------- | ------------------------
|
|
|Assets                                 |                         
|Short-term investments                 |                         
|Trading assets (1)                     |                         
|Investment securities: (1)             |                         
|U.S. government and federal agency     |                         
|States and political subdivisions      |                         
|Other                                  |                         
|                                      
|Total investment securities            |                         
|Loans (1) (2)                          |                         
|                                      
|Total earning assets                   |                         
|Allowance for credit losses            |                         
|Other assets - nonearning              |                         
|                                      
|Total assets                           |                         
|                                      
|Liabilities and Stockholders' Equity   |                         
|Interest-bearing deposits: (3)         |                         
|Savings                                |                         
|Money market                           |                         
|Time                                   |                         
|Foreign offices (4)                    |                         
|                                      
|Total deposits - interest-bearing      |                         
|Federal funds purchased and securities |                         
|under repurchase agreements            |                         
|Other short-term borrowings            |                         
|Long-term debt (5)                     |                         
|                                      
|Total interest-bearing liabilities     |                         
|                                      
|Noninterest-bearing deposits           |                         
|Other liabilities                      |                         
|Preferred stock                        |                         
|Common stockholders' equity            |                         
|                                      
|Total liabilities and equity           |                         
|                                      
|Interest income/earning assets         |                         
|Interest expense/earning assets        |                         
|                                      
|Net interest income/margin             |                         
|                                      

| | (1) | Includes
tax-equivalent adjustments based on federal income tax rate of 35%.
| | --- | ----------------------------------------------------------------------------

| | (2) | Nonperforming
loans are included in average balances used to determine average                rate.
| | --- | ---------------------------------------------------------------------------------------------------

| | (3) | On
a consolidated basis, demand deposit balances are routinely swept overnight
               into money market deposits. On a line of business basis, balances are
presented                without the impact of sweeps. Certain prior period data has been
adjusted to                conform with current period presentation.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (4) | Includes
international banking facilities deposit balances in domestic
               offices and balances of Edge Act and overseas offices.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------

| | (5) | Includes
trust preferred capital securities.
| | --- | --------------------------------------------

64

---

REPORT OF MANAGEMENT

Management
of Bank One Corporation and its subsidiaries (the Corporation) is responsible
for the preparation, integrity and fair presentation of its published financial reports.
These reports include consolidated financial statements that have been prepared in
accordance with accounting principles generally accepted in the United States of America,
using managements best judgment and all information available.

The
condensed consolidated financial statements of the Corporation have been reviewed by KPMG
LLP, independent public accountants. Their accompanying report is based upon a review
conducted in accordance with standards established by the American Institute of Certified
Public Accountants. The Audit and Risk Management Committee of the Board of Directors,
which consists solely of outside directors, meets at least quarterly with the independent
auditors, Corporate Audit and representatives of management to discuss, among other
things, accounting and financial reporting matters.

Management
of the Corporation is responsible for establishing and maintaining disclosure controls and
procedures to ensure that information required to be disclosed in reports filed or
submitted under the Securities Exchange Act of 1934 (the Exchange Act) is
recorded, processed, summarized and reported, within the time periods specified in the
Commissions rules and forms. In addition to disclosure controls and procedures,
management of the Corporation is responsible for establishing and maintaining an effective
process for internal control over financial reporting, which provides reasonable, but not
absolute, assurance of the safeguarding of assets against unauthorized acquisition, use or
disposition. The Corporation maintains systems of controls that it believes are reasonably
designed to provide management with timely and accurate information about the operations
of the Corporation. This process is supported by an internal audit function along with the
ongoing appraisal of controls by the Audit and Risk Management Committee. Both the
Corporations independent accountants and the internal audit function directly
provide reports on significant matters to the Audit and Risk Management Committee. The
Corporations independent accountants, the internal audit function and the Audit and
Risk Management Committee have free access to each other. Disclosure controls and
procedures, internal controls, systems and corporate-wide processes and procedures are
continually evaluated and enhanced.

Management
of the Corporation evaluated its disclosure controls and procedures as of June 30, 2003.
Based on this evaluation, the Principal Executive Officer and Principal Financial Officer
each concludes that as of June 30, 2003, the Corporation maintained effective
disclosure controls and procedures in all material respects, including those to ensure
that information required to be disclosed in reports filed or submitted under the Exchange
Act is recorded, processed, summarized and reported, within the time periods specified in
the Commissions rules and forms, and is accumulated and communicated to management,
including the Principal Executive Officer and the Principal Financial Officer, as
appropriate to allow for timely decisions regarding required disclosure. There has been no
change in the Corporations internal control over financial reporting that occurred
during the Corporations most recent fiscal quarter that has materially affected, or
is reasonably likely to materially affect, the Corporations internal control over
financial reporting.

The
Corporation is dedicated to maintaining a culture that reflects the highest standards of
integrity and ethical conduct when engaging in its business activities. Management of the
Corporation is responsible for compliance with various federal and state laws and
regulations, and the Corporation has established procedures that are designed to ensure
that managements policies relating to conduct, ethics and business practices are
followed on a uniform basis.

| |  | BANK ONE CORPORATION
| |  | --------------------

August 8, 2003

| |  | /s/ James Dimon
James DimonPrincipal Executive Officer
| |  | --------------------------------------------------------------------

| |  | /s/ Heidi Miller
Heidi MillerPrincipal Financial Officer
| |  | ----------------------------------------------------------------------

65

---

REVIEW REPORT OF
INDEPENDENT PUBLIC ACCOUNTANTS

The Board of Directors
and StockholdersBank One Corporation:

We
have reviewed the accompanying consolidated balance sheets of Bank One Corporation and
subsidiaries (the Corporation) as of June 30, 2003 and 2002, the related
consolidated income statements for the three and six month periods ended June 30, 2003 and
2002, and the related consolidated statements of stockholders equity and cash flows
for the six-month periods ended June 30, 2003 and 2002. These condensed consolidated
financial statements are the responsibility of the Corporations management.

We
conducted our reviews in accordance with standards established by the American Institute
of Certified Public Accountants. A review of interim financial information consists
principally of applying analytical procedures and making inquiries of persons responsible
for financial and accounting matters. It is substantially less in scope than an audit
conducted in accordance with auditing standards generally accepted in the United States of
America, the objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.

Based
on our reviews, we are not aware of any material modifications that should be made to the
condensed consolidated financial statements referred to above for them to be in conformity
with accounting principles generally accepted in the United States of America.

Chicago, IllinoisAugust
 7, 2003

| |  | /s/ KPMG LLP
KPMG LLP
| |  | -----------------------------------

66

---

FORM 10-Q

SECURITIES AND EXCHANGE
COMMISSION

Washington, D.C. 20549

(Mark One)

# [X] QUARTERLY REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For
the quarterly period ended June 30, 2003

OR

# [ ] TRANSITION REPORT
PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934

For the transition period from _____________ to _____________

Commission file number
001-15323

| | BANK ONE CORPORATION
(exact name of registrant as specified in its charter) | 
| | ------------------------------------------------------------------------------------------------------- | 

| | DELAWARE                          31-0738296
(State or other jurisdiction of                     (I.R.S. Employerincorporation or organization)                    Identification No.) | 
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | 

| | 1 BANK ONE PLAZA  CHICAGO, ILLINOIS             60670
(Address of principal executive offices)                 (Zip Code) | 
| | ----------------------------------------------------------------------------------------------------------------------------------------------------- | 

| | 312-732-4000
(Registrant's telephone number, including area code) | 
| | --------------------------------------------------------------------------------------------- | 

| | 
(Former name, former address and former fiscal year, if changed since last report) | 
| | --------------------------------------------------------------------------------------------------------------- | 

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.

Indicate
by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of
the Exchange Act).

Indicate
the number of shares outstanding of each of the issuers classes of common stock, as
of July 31, 2003.

|Class
Common Stock $0.01 par value |  | Number of Shares Outstanding
1,126,832,973 | 
|----------------------------------------------- |  | ------------------------------------------------------------- | 

67

---

Form 10-Q
Cross-Reference Index

PART
IFINANCIAL INFORMATION

|                                                                                                          |       | 
|--------------------------------------------------------------------------------------------------------- | ----- | 
|ITEM 1.  Financial Statements                                                                             |       | 
|                                                                                                          | Page  | 
|Consolidated Balance Sheets-            June 30, 2003 and 2002, and December 31, 2002                     | 47    | 
|                                                                                                          |      
|Consolidated Income Statements-            Three and six months ended June 30, 2003 and 2002              | 48   
|Consolidated Statements of Stockholders' Equity-            Six months ended June 30, 2003 and 2002       | 49   
|Consolidated Statements of Cash Flows-            Six months ended June 30, 2003 and 2002                 | 50   
|Notes to Consolidated Financial Statements                                                                | 51   
|Selected Statistical Information                                                                          | 62   
|ITEM 2.  Management's Discussion and Analysis of Financial            Condition and Results of Operations | 2-46  | 
|ITEM 3.  Quantitative and Qualitative Disclosures About Market Risk                                       | 27-30 | 
|ITEM 4.   Controls and Procedures                                                                         | 65    | 

PART
IIOTHER INFORMATION

|                                                             |    | 
|------------------------------------------------------------ | -- | 
|ITEM 1.  Legal Proceedings                                   | 69 | 
|ITEM 2.  Changes in Securities and Use of Proceeds           | 69 | 
|ITEM 3.  Defaults Upon Senior Securities                     | 69 | 
|ITEM 4.  Submission of Matters to a Vote of Security Holders | 69 | 
|ITEM 5.  Other Information                                   | 69
|ITEM 6.  Exhibits and Reports on Form 8-K                    | 70
|Signatures                                                   | 71

68

---

PART IIOTHER
INFORMATION

ITEM 1. Legal Proceedings                None

ITEM 2. Changes in
Securities and Use of Proceeds                None

ITEM 3. Defaults Upon
Senior Securities                 Not applicable

|ITEM | 4. | Submission of Matters to a Vote of Security Holders Bank One Corporation held its Annual
Meeting of Stockholders on Tuesday, April 15, 2003. A total of 996,181,626 shares were
represented in person or by proxy, or more than 85% of the total shares outstanding. The
results of shareholder voting on the two proposals presented were as follows:
|---- | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

1.    
          Proposal 1Stockholders elected the 13 Director nominees named in the Proxy
          Statement:

|Name                       | For         | Withheld  
|-------------------------- | ----------- | ----------
|John H. Bryan              | 981,817,971 | 14,363,655
|Stephen B. Burke           | 981,663,814 | 14,517,812
|James S. Crown             | 953,042,765 | 43,138,861
|James Dimon                | 979,825,022 | 16,356,604
|Maureen A. Fay             | 952,168,249 | 44,013,377
|John R. Hall               | 951,836,359 | 44,345,267
|Laban P. Jackson, Jr.      | 981,745,987 | 14,435,639
|John W. Kessler            | 952,214,791 | 43,966,835
|Robert I. Lipp             | 981,766,644 | 14,414,982
|Richard A. Manoogian       | 952,624,038 | 43,557,588
|David C. Novak             | 982,023,720 | 14,157,906
|John W. Rogers, Jr.        | 982,388,488 | 13,793,138
|Frederick P. Stratton, Jr. | 982,122,508 | 14,059,118

2.    
          Proposal 2Stockholders ratified the appointment of KPMG LLP as Bank
          Ones independent auditor for 2003:

|For         | Against    | Abstain  
|----------- | ---------- | ---------
|966,915,442 | 22,159,653 | 7,105,679

ITEM 5. Other Information                 None

69

---

ITEM 6. Exhibits and
Reports on Form 8-K

(a)  
          Exhibit 12Statement regarding computation of ratios.

|Exhibit | 15Letter
of independent public accountants regarding unaudited interim financial information.
|------- | ----------------------------------------------------------------------------------------------

|Exhibit | 31 (a)Certification of Chief Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
|------- | ----------------------------------------------------------------------------------------------------------

|Exhibit | 31 (b)Certification of Chief Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
|------- | ----------------------------------------------------------------------------------------------------------

|Exhibit | 32
(a)Certification of Chief Executive Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
|------- | ----------------------------------------------------------------------------------------------------------

|Exhibit | 32
(b)Certification of Chief Financial Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
|------- | ----------------------------------------------------------------------------------------------------------

(b)            The
Registrant filed the following Current Reports on Form 8-K during the           quarter
ended June 30, 2003.

| | Date | Item
Reported
| | ---- | -------------

| | April | 15,
2003    Registrants April 15, 2003 news release announcing its 2003 first quarter
earnings.
| | ----- | ------------------------------------------------------------------------------------------------

| | May | 30,
2003    Registrants May 30, 2003 news release announcing its agreement to purchase key
                  business components of Zurich Life Zurich Financial Services Group.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

70

---

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.

| |  |  | BANK ONE CORPORATION
| |  |  | --------------------

|Date | August 8, 2003 |  | /s/ James Dimon
James DimonPrincipal Executive Officer
|---- | ---------------------------- |  | --------------------------------------------------------------------

|Date | August 8, 2003 |  | /s/ Heidi Miller
Heidi MillerPrincipal Financial Officer
|---- | ---------------------------- |  | ----------------------------------------------------------------------

|Date | August 8, 2003 |  | /s/ Melissa J. Moore
Melissa J. MoorePrincipal Accounting Officer
|---- | ---------------------------- |  | -------------------------------------------------------------------------------

71

---

# BANK ONE CORPORATION

EXHIBIT INDEX

Exhibit Number              
Description of Exhibit

12                        Statement regarding computation of ratios.

15                        Letter of independent public accountants regarding unaudited interim financial information.

31
(a)           Certification of Chief Executive Officer pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.

31
(b)           Certification of Chief Financial Officer pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.

32
(a)           Certification of Chief Executive Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.

32
(b)           Certification of Chief Financial Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.

72

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EXHIBIT 12

# Statement Regarding
Computation of Ratios



The
ratios of income to fixed charges have been computed on the basis of the total enterprise
(as defined by the Commission) by dividing income before fixed charges and income taxes by
fixed charges. Fixed charges consist of interest expense on all long-term and short-term
borrowings, excluding or including interest on deposits as indicated below. The
computations of other ratios are evident from the information presented in this Form 10-Q
and the Corporations 2002 Annual Report.

# Bank One Corporation and
SubsidiariesCOMPUTATIONS OF
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES

|(In millions, except ratios)                      | Six Months Ended
June 30, 2003 | Year Ended
2002 | Year Ended
2001 | Year Ended
2000 (1) | Year Ended
1999
|------------------------------------------------- | ------------------------------ | --------------- | --------------- | ------------------- | ---------------
|EXCLUDING INTEREST ON DEPOSITS:                   |                                |                 |                 |                     |                
|Pretax income (loss) from continuing operations   |                                |                 | $               | 2,383               |                
|Earnings (loss) from unconsolidated entities      |                                |                
|under the equity method of accounting             |                                |                 |                 | 61                  |                
|Fixed charges, excluding capitalized interest     |                                |                 |                 | 1,336               |                
|                                                  |                                |                 |                 |                     |                
|Adjusted pretax earnings base                     |                                |                 |                 | 3,780               |                
|                                                  |                                |                
|Interest, excluding interest on deposits          |                                |                 |                 | 1,284               |                
|Rental factor                                     |                                |                 |                 | 52                  |                
|Capitalized interest                              |                                |                 |                 | 1                   |                
|                                                  |                                |                 |                 |                     |                
|Fixed charges                                     |                                |                 |                 | 1,337               |                
|Consolidated ratios of earnings to fixed charges, |                                |                
|excluding interest on deposits                    |                                |                 |                 | 2.8x                |                
|                                                  |                                |                
|INCLUDING INTEREST ON DEPOSITS:                   |                                |                
|Pretax income (loss) from continuing operations   |                                |                 | $               | 2,383               |                
|Earnings (loss) from unconsolidated entities      |                                |                
|under the equity method of accounting             |                                |                 |                 | 61                  |                
|Fixed charges, excluding capitalized interest     |                                |                 |                 | 2,418               |                
|                                                  |                                |                 |                 |                     |                
|Adjusted pretax earnings base                     |                                |                 |                 | 4,862               |                
|                                                  |                                |                
|Interest, including interest on deposits          |                                |                 |                 | 2,366               |                
|Rental factor                                     |                                |                 |                 | 52                  |                
|Capitalized interest                              |                                |                 |                 | 1                   |                
|                                                  |                                |                 |                 |                     |                
|Fixed charges                                     |                                |                 |                 | 2,419               |                
|Consolidated ratios of earnings to fixed charges, |                                |                
|including interest on deposits                    |                                |                 |                 | 2.0x                |                
|                                                  |                                |                 |                 |                     |                

| | (1) | Results for the year ended December 31, 2000 were insufficient to cover fixed
               charges. The coverage deficiency was approximately $1.2 billion.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------

73

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EXHIBIT 15

Bank One Corporation 1 Bank
One Plaza Chicago, Illinois 60670

Re: Quarterly Report Pursuant to Section 13 of the Securities Act of 1934 for the quarterly
period ended       June 30, 2003 as filed on Form 10-Q on August 8, 2003

With
respect to the subject quarterly report pursuant to Section 13 of the Securities Act of
1934 for the quarterly period ended June 30, 2003 as filed on Form 10-Q on August 8, 2003,
we acknowledge our awareness of the use therein of our report dated August 7, 2003,
related to our review of interim financial information.

Pursuant
to Rule 436 under the Securities Act of 1933 (the Act), such report is not
considered part of a registration statement prepared or certified by an accountant, or a
report prepared or certified by an accountant within the meaning of Sections 7 and 11 of
the Act.

Chicago,
Illinois      August 8, 2003

| |  | /s/ KPMG LLP
KPMG LLP
| |  | -----------------------------------

74

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EXHIBIT 31 (a)

I, James Dimon, certify that:

| | 1. | I
have reviewed this quarterly report on Form 10-Q of Bank One Corporation;
| | -- | ---------------------------------------------------------------------------

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

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

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

| | (a) | Designed
such disclosure controls and procedures, or caused such disclosure controls and
procedures to be designed under our supervision, to ensure that           material
information relating to the registrant, including its consolidated
          subsidiaries, is made known to us by others within those entities, particularly
          during the period in which this report is being prepared;
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b) | Evaluated
the effectiveness of the registrants disclosure controls and procedures and
presented in this report our conclusions about the effectiveness           of the
disclosure controls and procedures, as of the end of the period covered by this report
based on such evaluation; and
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c) | Disclosed
inthis report any change in the registrants internal control over financial
reporting that occurred during the registrants most recent fiscal quarter (the
registrants fourth fiscal quarter in the case of an annual report) that has
materially affected, or is reasonably likely to materially affect, the registrants
internal control over financial reporting; and
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 5. | The
registrants other certifying officer(s) and I have disclosed, based           on
our most recent evaluation of internal control over financial reporting, to           the
registrants auditors and the audit committee of the registrants
          board of directors (or persons performing the equivalent functions):
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (a) | All
significant deficiencies and material weaknesses in the design or operation of internal
control over financial reporting which are reasonably likely to adversely affect the
registrants ability to record, process, summarize and report financial information;
and
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b) | Any
fraud, whether or not material, that involves management  or other employees who have a
significant role in the registrants internal control over financial reporting.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------

August 8, 2003

| |  | /s/ James Dimon
James DimonPrincipal Executive Officer
| |  | --------------------------------------------------------------------

75

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EXHIBIT 31 (b)

I, Heidi Miller, certify that:

| | 1. | I
have reviewed this quarterly report on Form 10-Q of Bank One Corporation;
| | -- | ---------------------------------------------------------------------------

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

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

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

| | (a) | Designed
such disclosure controls and procedures, or caused such disclosure           controls and
procedures to be designed under our supervision, to ensure that           material
information relating to the registrant, including its consolidated
          subsidiaries, is made known to us by others within those entities, particularly
          during the period in which this report is being prepared;
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b) | Evaluated
the effectiveness of the registrants disclosure controls and           procedures
and presented in this report our conclusions about the effectiveness           of the
disclosure controls and procedures, as of the end of the period covered           by this
report based on such evaluation; and
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c) | Disclosed
in this report any change in the registrants internal control over financial
reporting that occurred during the registrants most recent fiscal quarter (the
registrants fourth fiscal quarter in the case of an annual report) that has
materially affected, or is reasonably likely to materially affect, the registrants
internal control over financial reporting; and
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 5. | The
registrants other certifying officer(s) and I have disclosed, based           on
our most recent evaluation of internal control over financial reporting, to           the
registrants auditors and the audit committee of the registrants
          board of directors (or persons performing the equivalent functions):
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (a) | All
significant deficiencies and material weaknesses in the design or operation           of
internal control over financial reporting which are reasonably likely to
          adversely affect the registrants ability to record, process, summarize
and           report financial information; and
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b) | Any
fraud, whether or not material, that involves management or other employees           who
have a significant role in the registrants internal control over
          financial reporting.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

August 8, 2003

| |  | /s/ Heidi Miller
Heidi MillerPrincipal Financial Officer
| |  | ----------------------------------------------------------------------

76

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EXHIBIT 32 (a)

I
hereby certify that this Form 10-Q, containing Bank One Corporations consolidated
financial statements as of and for the three and six months ended June 30, 2003, fully
complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934,
and the information contained in this Form 10-Q fairly presents, in all material respects,
the financial condition and results of operations of the Corporation.

August 8, 2003

| |  | /s/ James Dimon
James DimonChief Executive Officer
| |  | ----------------------------------------------------------------

77

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EXHIBIT 32 (b)

I
hereby certify that this Form 10-Q, containing Bank One Corporations consolidated
financial statements as of and for the three and six months ended June 30, 2003, fully
complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934,
and the information contained in this Form 10-Q fairly presents, in all material respects,
the financial condition and results of operations of the Corporation.

August 8, 2003

| |  | /s/ Heidi Miller
Heidi MillerChief Financial Officer
| |  | ------------------------------------------------------------------

78

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