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

FORM 10-Q/A
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1998

Commission file number 0-28118

UNIONBANCAL CORPORATION

State of Incorporation: California I.R.S. Employer Identification No.
94-1234979

350 California Street
San Francisco, California 94104
Telephone: (415) 765-2126

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

Number of shares of Common Stock outstanding at October 31, 1998: 58,403,188

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UNIONBANCAL CORPORATION AND SUBSIDIARIES

TABLE OF CONTENTS

PAGE NUMBER
-------------

PART I
FINANCIAL INFORMATION

Consolidated Financial Highlights..................................................................... 2

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

Item 2. Management's Discussion and Analysis:
Introduction........................................................................................ 11
Summary............................................................................................. 11
Analysis of Earnings................................................................................ 12
Net Interest Income................................................................................. 13
Noninterest Income.................................................................................. 14
Noninterest Expense................................................................................. 15
Year 2000........................................................................................... 15
Income Tax Expense.................................................................................. 16
Loans............................................................................................... 16
Cross-Border Outstandings........................................................................... 17
Allowance for Credit Losses......................................................................... 18
Nonperforming Assets................................................................................ 20
Loans 90 Days or More Past Due and Still Accruing................................................... 20
Liquidity........................................................................................... 20
Regulatory Capital.................................................................................. 21

Item 3. Market Risk................................................................................... 21

PART II
OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K.............................................................. 22

Signatures............................................................................................ 22

PART I. FINANCIAL INFORMATION

UNIONBANCAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL HIGHLIGHTS
(UNAUDITED)

FOR THE THREE MONTHS ENDED
--------------------------------------------------
INCREASE (DECREASE)
MARCH 31, MARCH 31, ------------------------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) 1998 1997 AMOUNT PERCENT
- ---------------------------------------------------------------------- ----------- ----------- ------------ ---------

RESULTS OF OPERATIONS:
Net interest income (taxable-equivalent) (1)........................ $ 318,646 $ 295,452 $ 23,194 7.85%
Provision for credit losses......................................... 20,000 -- 20,000 nm
Noninterest income.................................................. 128,030 114,786 13,244 11.54
Noninterest expense................................................. 268,475 253,138 15,337 6.06
----------- ----------- ------------
Income before income taxes (1)...................................... 158,201 157,100 1,101 0.70
Taxable-equivalent adjustment....................................... 1,196 1,421 (225) (15.83)
Income tax expense.................................................. 61,428 63,177 (1,749) (2.77)
----------- ----------- ------------
Net income.......................................................... $ 95,577 $ 92,502 $ 3,075 3.32%
----------- ----------- ------------
----------- ----------- ------------
NET INCOME APPLICABLE TO COMMON STOCK (2)............................. $ 95,577 $ 89,676 $ 5,901 6.58%
----------- ----------- ------------
----------- ----------- ------------
PER COMMON SHARE:
Net income--basic (2)............................................... $ 1.64 $ 1.54 $ 0.10 6.49%
Net income--diluted (2)............................................. 1.63 1.54 0.09 5.84
Pro forma net income--basic (3)..................................... 0.55 0.51 0.04 7.84
Pro forma net income--diluted (3)................................... 0.54 0.51 0.03 5.88
Dividends (4)....................................................... 0.42 0.35 0.07 20.00
Book value (end of period) (2)...................................... 47.16 41.60 5.56 13.37
Common shares outstanding (end of period) (2)....................... 58,332,204 58,160,302 171,902 0.30
Weighted average common shares outstanding--basic (2)............... 58,322,397 58,154,399 167,998 0.29
Weighted average common shares outstanding--diluted (2)............. 58,540,292 58,303,631 236,661 0.41
Pro forma weighted average common shares outstanding--basic (3)..... 174,967,192 174,463,198 503,994 0.29
Pro forma weighted average common shares outstanding--diluted (3)... 175,620,877 174,910,894 709,983 0.41
BALANCE SHEET (END OF PERIOD):
Total assets........................................................ $30,904,567 $29,423,537 $1,481,030 5.03%
Total loans......................................................... 22,504,043 21,246,054 1,257,989 5.92
Nonperforming assets................................................ 132,403 167,045 (34,642) (20.74)
Total deposits...................................................... 23,411,367 22,043,925 1,367,442 6.20
Subordinated capital notes.......................................... 348,000 282,000 66,000 23.40
Preferred stock..................................................... -- 135,000 (135,000) (100.00)
Common equity (2)................................................... 2,750,696 2,419,276 331,420 13.70
BALANCE SHEET (PERIOD AVERAGE):
Total assets........................................................ $29,865,256 $28,790,401 $1,074,855 3.73%
Total loans......................................................... 22,611,092 21,213,018 1,398,074 6.59
Earning assets...................................................... 26,502,646 25,448,021 1,054,625 4.14
Total deposits...................................................... 22,431,446 21,528,957 902,489 4.19
Common equity (2)................................................... 2,714,296 2,391,814 322,482 13.48
FINANCIAL RATIOS:
Return on average assets (5)........................................ 1.30% 1.30%
Return on average common equity (2)(6).............................. 14.28 15.21
Efficiency ratio (7)................................................ 60.15 61.60
Net interest margin (1)............................................. 4.85 4.69
Tier 1 risk-based capital ratio..................................... 9.16 9.15
Total risk-based capital ratio...................................... 11.23 10.85
Leverage ratio...................................................... 8.94 8.60
Allowance for credit losses to total loans.......................... 2.07 2.46
Allowance for credit losses to nonaccrual loans..................... 414.44 382.56
Net loans charged off to average total loans (8).................... 0.10 0.02
Nonperforming assets to total loans and foreclosed assets........... 0.59 0.79
Nonperforming assets to total assets................................ 0.43 0.57

- ------------------------------
(1) Amounts are on a taxable-equivalent basis using the federal statutory tax
rate of 35 percent.
(2) All periods have been restated to give retroactive effect to the exchange
on August 10, 1998 of 3.4 million shares of the Company's common stock for
the Bank of Tokyo-Mitsubishi Ltd.'s direct ownership interest in Union Bank
of California.
(3) See Note 5 of accompanying notes to consolidated financial statements for
information related to stock split declaration.
(4) Dividends per share reflect dividends declared on the Company's common
stock outstanding as of the declaration date.
(5) Based on annualized net income.
(6) Based on annualized net income applicable to common stock.
(7) The efficiency ratio is noninterest expense, excluding foreclosed asset
expense (income), as a percentage of net interest income
(taxable-equivalent) and noninterest income. Foreclosed asset expense
(income) was $(0.2) million in the first quarter of 1998 and $0.4 million
in the first quarter of 1997.
(8) Annualized.

nm = not meaningful

ITEM 1. FINANCIAL STATEMENTS

UNIONBANCAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)

FOR THE THREE
MONTHS
ENDED MARCH 31,
------------------
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA) 1998 1997
- -------------------------------------------------------------------------------- -------- --------

INTEREST INCOME
Loans......................................................................... $448,049 $422,518
Securities.................................................................... 42,895 38,047
Interest bearing deposits in banks............................................ 8,299 11,199
Federal funds sold and securities purchased under resale agreements........... 4,142 9,840
Trading account assets........................................................ 5,268 3,427
-------- --------
Total interest income..................................................... 508,653 485,031
-------- --------
INTEREST EXPENSE
Domestic deposits............................................................. 121,300 126,405
Foreign deposits.............................................................. 23,577 17,909
Federal funds purchased and securities sold under repurchase agreements....... 14,075 10,391
Commercial paper.............................................................. 21,395 19,853
Subordinated capital notes.................................................... 5,754 5,503
Other borrowed funds.......................................................... 5,102 10,939
-------- --------
Total interest expense.................................................... 191,203 191,000
-------- --------
NET INTEREST INCOME............................................................. 317,450 294,031
Provision for credit losses..................................................... 20,000 --
-------- --------
Net interest income after provision for credit losses..................... 297,450 294,031
-------- --------
NONINTEREST INCOME
Service charges on deposit accounts........................................... 33,026 27,121
Trust and investment management fees.......................................... 27,993 23,898
International commissions and fees............................................ 17,631 15,079
Credit card merchant fees..................................................... 14,379 13,044
Merchant banking fees......................................................... 9,622 8,380
Securities gains, net......................................................... 4,926 471
Other......................................................................... 20,453 26,793
-------- --------
Total noninterest income.................................................. 128,030 114,786
-------- --------
NONINTEREST EXPENSE
Salaries and employee benefits................................................ 150,383 140,788
Net occupancy................................................................. 22,025 19,630
Equipment..................................................................... 13,839 13,687
Communications................................................................ 11,229 10,268
Credit card processing........................................................ 10,080 9,722
Data processing............................................................... 6,502 6,423
Printing and office supplies.................................................. 6,335 6,169
Advertising and public relations.............................................. 6,051 6,009
Foreclosed asset expense (income)............................................. (198) 411
Merger and integration........................................................ -- 6,037
Other......................................................................... 42,229 33,994
-------- --------
Total noninterest expense................................................. 268,475 253,138
-------- --------
Income before income taxes...................................................... 157,005 155,679
Income tax expense.............................................................. 61,428 63,177
-------- --------
NET INCOME...................................................................... $ 95,577 $ 92,502
-------- --------
-------- --------
NET INCOME APPLICABLE TO COMMON STOCK (1)....................................... $ 95,577 $ 89,676
-------- --------
-------- --------
NET INCOME PER COMMON SHARE--BASIC (1).......................................... $ 1.64 $ 1.54
-------- --------
-------- --------
NET INCOME PER COMMON SHARE--DILUTED (1)........................................ $ 1.63 $ 1.54
-------- --------
-------- --------
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING--BASIC (1)........................... 58,322 58,154
-------- --------
-------- --------
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING--DILUTED (1)......................... 58,540 58,304
-------- --------
-------- --------
PRO FORMA NET INCOME PER COMMON SHARE--BASIC (2)................................ $ 0.55 $ 0.51
-------- --------
-------- --------
PRO FORMA NET INCOME PER COMMON SHARE--DILUTED (2).............................. $ 0.54 $ 0.51
-------- --------
-------- --------
PRO FORMA WEIGHTED AVERAGE COMMON SHARES OUTSTANDING--BASIC (2)................. 174,967 174,463
-------- --------
-------- --------
PRO FORMA WEIGHTED AVERAGE COMMON SHARES OUTSTANDING--DILUTED (2)............... 175,621 174,911
-------- --------
-------- --------

- ------------------------------
(1) Amounts restated to reflect the exchange referred to in Note 1 of the
accompanying notes to consolidated financial statements.
(2) See Note 5 of accompanying notes to consolidated financial statements for
information statements for information related to stock split declaration.

See accompanying notes to consolidated financial statements.

UNIONBANCAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)

MARCH 31, DECEMBER 31, MARCH 31,
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA) 1998 1997 1997
- --------------------------------------------------------------------- ------------- ------------ -------------

ASSETS
Cash and due from banks.............................................. $ 2,449,290 $2,541,699 $ 2,172,478
Interest bearing deposits in banks................................... 193,578 633,421 681,308
Federal funds sold and securities purchased under resale agreements.. 743,887 24,335 650,790
------------- ------------ -------------
Total cash and cash equivalents.................................. 3,386,755 3,199,455 3,504,576
Trading account assets............................................... 851,189 394,313 496,556
Securities available for sale........................................ 2,807,124 2,538,386 2,244,233
Securities held to maturity (market value: March 31, 1998, $179,317;
December 31, 1997, $193,115; March 31, 1997, $262,568).............. 175,696 188,775 259,430
Loans (net of allowance for credit losses: March 31, 1998, $466,043;
December 31, 1997, $451,692; March 31, 1997, $522,835).............. 22,038,000 22,289,716 20,723,219
Due from customers on acceptances.................................... 535,754 773,339 948,064
Premises and equipment, net.......................................... 395,272 406,299 411,424
Other assets......................................................... 714,777 794,982 836,035
------------- ------------ -------------
Total assets..................................................... $30,904,567 $30,585,265 $29,423,537
------------- ------------ -------------
------------- ------------ -------------
LIABILITIES
Domestic deposits:
Noninterest bearing................................................ $ 9,047,869 $8,574,515 $ 7,612,287
Interest bearing................................................... 12,201,217 12,666,458 12,620,106
Foreign deposits:
Noninterest bearing................................................ 271,250 275,029 296,692
Interest bearing................................................... 1,891,031 1,780,372 1,514,840
------------- ------------ -------------
Total deposits................................................... 23,411,367 23,296,374 22,043,925
Federal funds purchased and securities sold under repurchase
agreements.......................................................... 1,009,523 1,335,884 809,846
Commercial paper..................................................... 1,588,589 966,575 1,427,588
Other borrowed funds................................................. 401,221 476,010 796,929
Acceptances outstanding.............................................. 535,754 773,339 948,064
Other liabilities.................................................... 859,417 709,784 560,909
Subordinated capital notes........................................... 348,000 348,000 282,000
------------- ------------ -------------
Total liabilities................................................ 28,153,871 27,905,966 26,869,261
------------- ------------ -------------
SHAREHOLDERS' EQUITY (1)
Preferred stock:
Authorized 5,000,000 shares 8 3/8% Noncumulative, Series A, issued
1,350,000 shares as of March 31, 1997............................ -- -- 135,000
Common stock--$5 stated value:
Authorized 100,000,000 shares, issued 58,332,204 as of March 31,
1998, 58,305,891 as of December 31, 1997, and 58,160,302 as of
March 31, 1997................................................... 291,661 291,529 290,801
Additional paid-in capital........................................... 1,424,139 1,422,680 1,413,346
Retained earnings.................................................... 1,029,401 957,662 715,096
Accumulated other comprehensive income............................... 5,495 7,428 33
------------- ------------ -------------
Total shareholders' equity....................................... 2,750,696 2,679,299 2,554,276
------------- ------------ -------------
Total liabilities and shareholders' equity....................... $30,904,567 $30,585,265 $29,423,537
------------- ------------ -------------
------------- ------------ -------------

- --------------------------
(1) Amounts restated to give retroactive effect to the exchange referred to in
Note 1 of the accompanying notes to consolidated financial statements.

See accompanying notes to consolidated financial statements.

UNIONBANCAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY(1)
(UNAUDITED)

FOR THE THREE MONTHS
ENDED MARCH 31,
------------------------
(DOLLARS IN THOUSANDS) 1998 1997
- ---------------------------------------------------------------------------------------- ----------- -----------

PREFERRED STOCK
Balance, beginning of period............................................................ $ -- $ 135,000
Redemption of preferred stock........................................................... -- --
----------- -----------
Balance, end of period................................................................ $ -- $ 135,000
----------- -----------
COMMON STOCK
Balance, beginning of period............................................................ $ 291,529 $ 290,762
Dividend reinvestment plan.............................................................. 3 1
Deferred compensation--restricted stock awards.......................................... 1 (5)
Stock options exercised................................................................. 128 43
----------- -----------
Balance, end of period................................................................ $ 291,661 $ 290,801
----------- -----------
ADDITIONAL PAID-IN CAPITAL
Balance, beginning of period............................................................ $ 1,422,680 $ 1,413,076
Dividend reinvestment plan.............................................................. 3 (35)
Deferred compensation--restricted stock awards.......................................... 108 (34)
Stock options exercised................................................................. 1,348 339
----------- -----------
Balance, end of period................................................................ $ 1,424,139 $ 1,413,346
----------- -----------
RETAINED EARNINGS
Balance, beginning of period............................................................ $ 957,662 $ 645,214
Net income(2)........................................................................... 95,577 92,502
Dividends on common stock(3)............................................................ (24,538) (20,386)
Dividends on preferred stock............................................................ -- (2,826)
Deferred compensation--restricted stock awards.......................................... 700 592
----------- -----------
Balance, end of period................................................................ $ 1,029,401 $ 715,096
----------- -----------
ACCUMULATED OTHER COMPREHENSIVE INCOME
Balance, beginning of period............................................................ $ 7,428 $ 10,881
Net income(2)........................................................................... 95,577 92,502
Other comprehensive income.............................................................. (1,933) (10,848)
----------- -----------
Comprehensive income.................................................................... 101,072 92,535
Less: net income included in retained earnings.......................................... (95,577) (92,502)
----------- -----------
Balance, end of period................................................................ $ 5,495 $ 33
----------- -----------
TOTAL SHAREHOLDERS' EQUITY.......................................................... $ 2,750,696 $ 2,554,276
----------- -----------
----------- -----------

- ------------------------------
(1) Amounts restated to give retroactive effect to the exchange referred to in
Note 1 of the accompanying notes to consolidated financial statements.
(2) Includes income applicable to preferred shareholders of $2.8 million in the
first quarter of 1997.
(3) Dividends per share were $0.42 and $0.35 in the first quarter of 1998 and
1997, respectively, and are based on the Company's shares outstanding as of
the declaration date.

See accompanying notes to consolidated financial statements.

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

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income............................................................................ $ 95,577 $ 92,502
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses......................................................... 20,000 --
Depreciation, amortization and accretion............................................ 16,850 16,288
Provision for deferred income taxes................................................. 12,467 8,401
Gain on sales of securities available for sale...................................... (4,926) (471)
Merger and integration costs less than cash utilized................................ (8,662) (9,323)
Net increase in trading account assets.............................................. (456,876) (8,554)
Other, net.......................................................................... 233,032 (57,712)
----------- -----------
Total adjustments................................................................. (188,115) (51,371)
----------- -----------
Net cash (used) provided by operating activities...................................... (92,538) 41,131
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of securities available for sale.................................. 317,209 594
Proceeds from matured and called securities available for sale........................ 65,072 45,840
Purchase of securities available for sale............................................. (668,162) (138,044)
Proceeds from matured and called securities held to maturity.......................... 13,136 8,871
Net decrease (increase) in loans...................................................... 224,162 (206,892)
Other, net............................................................................ 15,694 (18,568)
----------- -----------
Net cash used by investing activities............................................... (32,889) (308,199)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in deposits.............................................................. 114,993 510,965
Net decrease in federal funds purchased and securities sold under repurchase
agreements.......................................................................... (326,361) (512,808)
Net increase (decrease) in commercial paper and other borrowed funds.................. 547,225 (20,368)
Maturity and redemption of subordinated debt.......................................... -- (100,000)
Dividends paid........................................................................ (24,528) (23,211)
Other, net............................................................................ 1,829 835
----------- -----------
Net cash provided (used) by financing activities.................................... 313,158 (144,587)
----------- -----------
Net increase (decrease) in cash and cash equivalents.................................... 187,731 (411,655)
Cash and cash equivalents at beginning of period........................................ 3,199,455 3,937,697
Effect of exchange rate changes on cash and cash equivalents............................ (431) (21,466)
----------- -----------
Cash and cash equivalents at end of period.............................................. $ 3,386,755 $ 3,504,576
----------- -----------
----------- -----------
CASH PAID DURING THE PERIOD FOR:
Interest.............................................................................. $ 200,270 $ 191,870
Income taxes.......................................................................... 17,843 502
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
Loans transferred to foreclosed assets (OREO)......................................... $ 6,990 $ 7,821
Dividends declared but unpaid......................................................... 24,538 20,386

See accompanying notes to consolidated financial statements.

UNIONBANCAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1998
(UNAUDITED)

NOTE 1--BASIS OF PRESENTATION AND NATURE OF OPERATIONS

The unaudited consolidated financial statements of UnionBanCal Corporation
and subsidiaries (the Company) have been prepared in accordance with generally
accepted accounting principles (GAAP) for interim financial reporting and the
instructions to Form 10-Q. However, they do not include all of the information
and disclosures necessary for annual financial statements in conformity with
GAAP. Accordingly, these unaudited consolidated financial statements should be
read in conjunction with the audited consolidated financial statements included
in the Company's Form 10-K/A for the year ended December 31, 1997. The
preparation of financial statements in conformity with GAAP requires management
to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expense during
the reporting period. Actual results could differ from those estimates.

On August 10, 1998, the Company exchanged 3.4 million shares of its common
stock for The Bank of Tokyo-Mitsubishi, Ltd.'s (BTM) 6 percent direct ownership
interest in Union Bank of California, N.A. (the Bank). This share exchange
provides the Company with a 100 percent ownership interest in the Bank. In
addition, it increases BTM's ownership percentage of the Company to 82 percent
from 81 percent.

The exchange of shares was accounted for as a reorganization of entities
under common control. Accordingly, amounts previously reported as Parent Direct
Interest in Bank Subsidiary, including the proportionate share of net income,
dividends, and other comprehensive income have been reclassified to combine with
the corresponding amounts attributable to the Company's common shareholders for
all periods presented.

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

NOTE 2--RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In June 1996, Statement of Financial Accounting Standards (SFAS) No. 125,
"Accounting for Transfers and Servicing of Financial Assets and Extinguishments
of Liabilities", was issued. This Statement establishes standards for when
transfers of financial assets, including those with continuing involvement by
the transferor, should be considered a sale. SFAS No. 125 also establishes
standards for when a liability should be considered extinguished. This Statement
is effective for transfers of assets and extinguishments of liabilities after
December 31, 1996. In December 1996, the Financial Accounting Standards Board
(FASB) reconsidered certain provisions of SFAS No. 125 and issued SFAS No. 127,
"Deferral of the Effective Date of Certain Provisions of FASB Statement No.
125", to defer for one year the effective date of implementation for
transactions related to repurchase agreements, dollar-roll repurchase
agreements, securities lending and similar transactions. Management determined
that the effect of adoption of SFAS No. 125 and SFAS No. 127 on the Company's
financial statements was not material.

In June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments of
an Enterprise and Related Information", which establishes annual and interim
reporting standards for an enterprise's operating segments and related
disclosures about its products, services, geographic areas, and major customers.
Adoption of this Statement will not impact the Company's consolidated financial
position, results of operations or cash flows, and any effect will be limited to
the form and content of its disclosures. This Statement is effective for fiscal
years beginning after December 15, 1997, with earlier application permitted. The
Company expects to adopt SFAS No. 131 at December 31, 1998.

UNIONBANCAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1998
(UNAUDITED)

NOTE 2--RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (CONTINUED)
In February 1998, the FASB issued SFAS No. 132, "Employers' Disclosures
about Pensions and Other Postretirement Benefits". The Standard revises the
disclosure requirements for pensions and other postretirement benefits. Adoption
of this Statement will not impact the Company's consolidated financial position,
results of operations or cash flows, and any effect will be limited to the form
and content of its disclosures. This Statement is effective for fiscal years
beginning after December 15, 1997.

In March 1998, the American Institute of Certified Public Accountants issued
Statement of Position (SOP) 98-1, "Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use". SOP 98-1 requires the capitalization of
eligible costs of specified activities related to computer software developed or
obtained for internal use. Management believes that the adoption of SOP 98-1
will not have a material effect on the Company's financial position or results
of operations. The Statement will become effective for fiscal years beginning
after December 15, 1998, with earlier adoption encouraged.

NOTE 3--EARNINGS PER SHARE

Basic earnings per share (EPS) is computed by dividing net income after
preferred dividends by the weighted average number of common shares outstanding
during the period. Diluted EPS incorporates the dilutive effect of common stock
equivalents outstanding on an average basis during the period. Stock options are
a common stock equivalent. The following table presents a reconciliation of
basic and diluted EPS for the three months ended March 31, 1998 and 1997 in
accordance with SFAS No. 128:

THREE MONTHS ENDED MARCH 31,
----------------------------------------------
1998 1997
---------------------- ----------------------
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA) BASIC DILUTED BASIC DILUTED
- ----------------------------------------------------------------- ---------- ---------- ---------- ----------

Net income....................................................... $ 95,577 $ 95,577 $ 92,502 $ 92,502
Less:
Dividends on preferred stock................................... -- -- (2,826) (2,826)
---------- ---------- ---------- ----------
Income available to common shareholders(1)....................... $ 95,577 $ 95,577 $ 89,676 $ 89,676
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------

Weighted average common shares outstanding(1).................... 58,322 58,322 58,154 58,154
Additional shares due to:
Assumed conversion of dilutive stock options................... -- 218 -- 150
---------- ---------- ---------- ----------
Adjusted weighted average common shares outstanding(1)........... 58,322 58,540 58,154 58,304
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Net income per share(1).......................................... $ 1.64 $ 1.63 $ 1.54 $ 1.54
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------

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

(1) Amounts restated to reflect the exchange referred to in Note 1 of the
accompanying notes to consolidated financial statements.

NOTE 4--COMPREHENSIVE INCOME

In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive
Income", which requires that an enterprise report and display, by major
components and as a single total, the change in its net assets during the period
from non-owner sources. This Statement is effective for fiscal years beginning
after December 15, 1997. The adoption of this Statement in the first quarter of
1998 resulted in a change in

UNIONBANCAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1998
(UNAUDITED)

NOTE 4--COMPREHENSIVE INCOME (CONTINUED)
the financial statement presentation, but did not have an impact on the
Company's consolidated financial position, results of operations or cash flows.
Certain amounts in the prior period have been reclassified to conform to the
current presentation under SFAS No. 130.

The following is a summary of the components of accumulated other
comprehensive income.

FOR THE THREE MONTHS ENDED
--------------------------------------
MARCH 31, 1998 MARCH 31, 1997
------------------ ------------------
ACCUMULATED OTHER ACCUMULATED OTHER
COMPREHENSIVE COMPREHENSIVE
(DOLLARS IN THOUSANDS) INCOME(1) INCOME(1)
- ------------------------------------------------------ ------------------ ------------------

Net unrealized gain (loss) on available for sale
securities, net of reclassification adjustment:
Beginning balance................................... $ 19,886 $ 14,064
Net unrealized gain (loss) on available for sale
securities during the quarter, before tax......... 1,094 (16,063)
Income tax (expense) benefit........................ (443) 6,505
Less: reclassification adjustment for net realized
gains on available for sale securities included in
net income during the quarter, before tax......... (4,926) (471)
Plus: income tax expense............................ 1,995 191
-------- --------
Net activity........................................ (2,280) (9,838)
-------- --------
Ending balance...................................... 17,606 4,226
-------- --------
Foreign currency translation adjustments:
Beginning balance................................... (12,458) (3,183)
Foreign currency translation adjustments during the
quarter, before tax............................... 583 (1,697)
Income tax (expense) benefit........................ (236) 687
-------- --------
Net activity........................................ 347 (1,010)
-------- --------
Ending balance...................................... (12,111) (4,193)
-------- --------
Other comprehensive income............................ $ (1,933) $ (10,848)
-------- --------
-------- --------
Accumulated other comprehensive income................ $ 5,495 $ 33
-------- --------
-------- --------

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

(1) Amounts restated to reflect the exchange referred to in Note 1 of the
accompanying notes to consolidated financial statements.

NOTE 5--SUBSEQUENT EVENTS AND PRO FORMA INFORMATION

On April 16, 1998, the Company sold its credit card portfolio to First
National Bank of Omaha in Omaha, Nebraska. The sale of $253 million in credit
card receivables resulted in a pre-tax gain of $17 million, which will be
recognized in the second quarter of 1998.

UNIONBANCAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1998
(UNAUDITED)

NOTE 5--SUBSEQUENT EVENTS AND PRO FORMA INFORMATION (CONTINUED)
On November 18, 1998, the Company's Board of Directors approved the
declaration of a 3 for 1 stock split effective for shareholders of record on
December 7, 1998. The following table presents a retroactive reconciliation of
the pro forma basic and diluted EPS for the three months ended March 31, 1998
and 1997, assuming that the stock split has occurred:

Net income....................................................... $ 95,577 $ 95,577 $ 92,502 $ 92,502
Less:
Dividends on preferred stock................................... -- -- (2,826) (2,826)
---------- ---------- ---------- ----------
Income available to common shareholders.......................... $ 95,577 $ 95,577 $ 89,676 $ 89,676
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------

Pro forma weighted average common shares outstanding............. 174,967 174,967 174,463 174,463
Pro forma additional shares due to:
Assumed conversion of dilutive stock options................... -- 654 -- 448
---------- ---------- ---------- ----------
Pro forma adjusted weighted average common shares outstanding.... 174,967 175,621 174,463 174,911
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Pro forma net income per share................................... $ 0.55 $ 0.54 $ 0.51 $ 0.51
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------

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

INTRODUCTION

UnionBanCal Corporation (UNBC) is a San Francisco, California-based bank
holding company with consolidated assets of $30.9 billion at March 31, 1998.
Based on total assets, UNBC and its consolidated subsidiaries (the Company) was
the third largest bank holding company in California and among the 30 largest in
the United States. At March 31, 1998, the Company operated 240 banking offices
in California, 5 banking offices in Oregon and Washington, and 18 overseas
facilities. UNBC is 82 percent owned by The Bank of Tokyo-Mitsubishi, Ltd. (BTM)
and 18 percent owned by other shareholders. UNBC's principal subsidiary, Union
Bank of California, N.A. (the Bank), is wholly owned by UNBC. (See Note 1 of the
Company's accompanying notes to the consolidated financial statements.)

THIS DOCUMENT MAY CONTAIN FORWARD-LOOKING STATEMENTS THAT ARE SUBJECT TO
RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY
FROM THOSE INDICATED. FOR A DISCUSSION OF FACTORS THAT COULD CAUSE ACTUAL
RESULTS TO DIFFER, PLEASE SEE THE DISCUSSION CONTAINED HEREIN AND IN THE
COMPANY'S PUBLICLY AVAILABLE SECURITIES AND EXCHANGE COMMISSION FILINGS AND
PRESS RELEASES.

The interim financial information should be read in conjunction with the
Company's Form 10-K for the year ended December 31, 1997. Certain amounts for
prior periods have been reclassified to conform with current financial statement
presentation.

SUMMARY

Net income in the first quarter of 1998 was $95.6 million. Net income in the
first quarter of 1997 was $92.5 million. Net income applicable to common stock
was $95.6 million, or $1.63 per diluted common share, in the first quarter of
1998, compared with $89.7 million, or $1.54 per diluted common share, in the
first quarter of 1997. Other highlights of the first quarter of 1998 include:

- Net interest income, on a taxable-equivalent basis, was $318.6 million in
the first quarter of 1998, a $23.2 million, or 8 percent, increase from
the comparable period one year earlier. The increase in net interest
income was primarily due to a 16 basis point increase in the net interest
margin and a $1.1 billion, or 4 percent, increase in average earning
assets, resulting primarily from a $1.4 billion, or 7 percent, increase in
average loans largely funded by a $1.0 billion, or 15 percent, increase in
average noninterest bearing deposits.

- A provision for credit losses of $20.0 million was recorded in the first
quarter of 1998, compared with no provision in 1997. This resulted from
management's regular quarterly assessment of overall credit quality, loan
growth and economic conditions in relation to the level of the allowance
for credit losses. Nonperforming assets declined $34.6 million, or 21
percent, from March 31, 1997 to $132.4 million at March 31, 1998.
Nonperforming assets as a percentage of total assets declined to 0.43
percent at March 31, 1998, compared with 0.57 percent a year earlier.
Total nonaccrual loans at March 31, 1998 and 1997 were $112.5 million and
$136.7 million, respectively. The ratio of nonaccrual loans to total loans
declined from 0.64 percent to 0.50 percent.

- Noninterest income was $128.0 million, an increase of $13.2 million, or 12
percent, over the first quarter of 1997. Service charges on deposit
accounts grew $5.9 million, or 22 percent, reflecting growth in average
deposits; trust and investment management fees increased $4.1 million, or
17 percent, on growth in assets under management; and securities gains,
net increased $4.5 million.

- Noninterest expense was $268.5 million for the first quarter of 1998,
compared with $253.1 million for the first quarter of 1997, an increase of
$15.3 million, or 6 percent. Personnel-related expense increased $9.6
million, or 7 percent, primarily due to a $5.5 million increase in
performance-based incentive compensation. Net occupancy expense increased
$2.4 million, or 12 percent.

- The effective tax rate for the first quarter of 1998 was 39 percent,
compared with 41 percent for the first quarter of 1997. The lower
effective tax rate in the first quarter of 1998 reflects the benefits
recognized from filing a California Franchise Tax return based on the
unitary concept, which incorporates the financial results of BTM.

- In the first quarter of 1998, the return on average assets remained
unchanged at 1.30 percent from a year earlier. The return on average
common equity was 14.28 percent at March 31, 1998 compared to 15.21
percent at March 31, 1997.

- Total loans at March 31, 1998 increased $1.3 billion, or 6 percent, over
March 31, 1997, primarily due to growth in the commercial, financial and
industrial portfolio. At $22.5 billion, total loans were 1 percent lower
at March 31, 1998 than at December 31, 1997.

- The Company's Tier 1 and total risk-based capital ratios were 9.16 percent
and 11.23 percent at March 31, 1998, compared with 9.15 percent and 10.85
percent at March 31, 1997. The first quarter 1998 leverage ratio for the
Company was 8.94 percent, compared with 8.60 percent for the first quarter
of 1997. The increase in the Tier 1 risk-based capital ratio was
attributable to retained earnings growing faster than risk-weighted
assets, partly offset by the redemption of $135.0 million of preferred
stock in the third quarter of 1997. The increase in the total risk-based
capital ratio was attributable to the issuance of $200.0 million in
subordinated capital notes in the second quarter of 1997.

ANALYSIS OF EARNINGS

FOR THE THREE MONTHS ENDED
------------------------------------------------
INCREASE (DECREASE)
MARCH 31, MARCH 31, ----------------------
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA) 1998 1997 AMOUNT PERCENT
- -------------------------------------------------------------------- ----------- ----------- ----------- ---------

EARNINGS SUMMARY
Interest income(1)................................................ $ 509,849 $ 486,452 $ 23,397 4.81%
Interest expense.................................................. 191,203 191,000 203 0.11
----------- ----------- -----------
Net interest income(1)............................................ 318,646 295,452 23,194 7.85
Provision for credit losses....................................... 20,000 -- 20,000 nm
Noninterest income................................................ 128,030 114,786 13,244 11.54
Noninterest expense............................................... 268,475 253,138 15,337 6.06
----------- ----------- -----------
Income before income taxes(1)..................................... 158,201 157,100 1,101 0.70
Taxable-equivalent adjustment..................................... 1,196 1,421 (225) (15.83)
Income tax expense................................................ 61,428 63,177 (1,749) (2.77)
----------- ----------- -----------
Net income........................................................ $ 95,577 $ 92,502 $ 3,075 3.32%
----------- ----------- -----------
----------- ----------- -----------
Net income applicable to common stock (2)......................... $ 95,577 $ 89,676 $ 5,901 6.58%
----------- ----------- -----------
----------- ----------- -----------
PER COMMON SHARE
Net income--basic (2)............................................. $ 1.64 $ 1.54 $ 0.10 6.49%
Net income--diluted (2)........................................... 1.63 1.54 0.09 5.84
Dividends (3)..................................................... 0.42 0.35 0.07 20.00
Book value (end of period) (2).................................... 47.16 41.60 5.56 13.37
Weighted average common share outstanding--basic (2).............. 58,322 58,154 168 0.29
Weighted average common share outstanding--diluted (2)............ 58,540 58,304 236 0.40

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

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

(2) Amounts restated to reflect the exchange referred to in Note 1 of the
accompanying notes to consolidated financial statements.

(3) Dividends per share are based on the Company's shares outstanding as of the
declaration date.

nm = not meaningful

NET INTEREST INCOME

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

FOR THE THREE MONTHS ENDED
-----------------------------------------------------------------------
MARCH 31, 1998 MARCH 31, 1997
---------------------------------- ----------------------------------
INTEREST AVERAGE INTEREST AVERAGE
AVERAGE INCOME/ YIELD/ AVERAGE INCOME/ YIELD/
(DOLLARS IN THOUSANDS) BALANCE EXPENSE(1) RATE(1) BALANCE EXPENSE(1) RATE(1)
- ---------------------------------------------------------- ----------- ----------- ------- ----------- ----------- -------

ASSETS
Loans: (2)
Domestic................................................ $21,193,940 $ 424,538 8.10% $19,827,556 $ 401,579 8.21%
Foreign (3)............................................. 1,417,152 23,717 6.79 1,385,462 21,230 6.21
Securities--taxable (4)................................... 2,571,452 41,019 6.41 2,312,482 35,829 6.24
Securities--tax-exempt (4)................................ 112,809 2,826 10.02 134,157 3,348 9.98
Interest bearing deposits in banks........................ 533,462 8,299 6.31 802,784 11,199 5.66
Federal funds sold and securities purchased under resale
agreements.............................................. 298,288 4,142 5.63 733,499 9,840 5.44
Trading account assets.................................... 375,543 5,308 5.73 252,081 3,427 5.51
----------- ----------- ----------- -----------
Total earning assets.................................. 26,502,646 509,849 7.78 25,448,021 486,452 7.73
----------- -----------
Allowance for credit losses............................... (458,761) (531,621)
Cash and due from banks................................... 1,953,427 2,032,209
Premises and equipment, net............................... 402,392 416,582
Other assets.............................................. 1,465,552 1,425,210
----------- -----------
Total assets.......................................... $29,865,256 $28,790,401
----------- -----------
----------- -----------

LIABILITIES
Domestic deposits:
Interest bearing........................................ $ 5,447,502 38,448 2.86 $ 5,212,126 35,961 2.80
Savings and consumer time............................... 3,079,386 29,212 3.85 2,918,508 27,025 3.76
Large time.............................................. 3,917,627 53,640 5.55 4,755,047 63,419 5.41
Foreign deposits (3)...................................... 1,837,349 23,577 5.20 1,540,546 17,909 4.71
----------- ----------- ----------- -----------
Total interest bearing deposits....................... 14,281,864 144,877 4.11 14,426,227 144,314 4.06
----------- ----------- ----------- -----------
Federal funds purchased and securities sold under
repurchase agreements................................... 1,080,828 14,075 5.28 819,980 10,391 5.14
Subordinated capital notes................................ 349,111 5,754 6.68 343,111 5,503 6.51
Commercial paper.......................................... 1,568,756 21,395 5.53 1,512,649 19,853 5.32
Other borrowed funds...................................... 365,488 5,102 5.66 779,123 10,939 5.69
----------- ----------- ----------- -----------
Total borrowed funds.................................. 3,364,183 46,326 5.58 3,454,863 46,686 5.48
----------- ----------- ----------- -----------
Total interest bearing liabilities.................... 17,646,047 191,203 4.39 17,881,090 191,000 4.33
----------- -----------
Noninterest bearing deposits.............................. 8,149,582 7,102,730
Other liabilities......................................... 1,355,331 1,279,767
----------- -----------
Total liabilities..................................... 27,150,960 26,263,587
SHAREHOLDERS' EQUITY......................................
Preferred stock........................................... -- 135,000
Common equity(5).......................................... 2,714,296 2,391,814
----------- -----------
Total shareholders' equity............................ 2,714,296 2,526,814
----------- -----------
Total liabilities and shareholders' equity............ $29,865,256 $28,790,401
----------- -----------
----------- -----------
Net interest income/margin (taxable-equivalent basis)..... 318,646 4.85% 295,452 4.69%
Less: taxable-equivalent adjustment....................... 1,196 1,421
----------- -----------
Net interest income................................... $ 317,450 $ 294,031
----------- -----------
----------- -----------

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

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

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

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

(4) Yields on securities available for sale were based on fair value. The
difference between these yields and those based on amortized cost was not
significant.

(5) Amounts restated to reflect the exchange referred to in Note 1 of the
accompanying notes to consolidated financial statements.

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

Net interest income, on a taxable-equivalent basis, was $318.6 million for
the first quarter of 1998, compared with $295.5 million for the first quarter of
1997. This increase of $23.2 million, or 8 percent, was primarily attributable
to a $1.1 billion, or 4 percent, increase in average earning assets largely
funded by a $1.0 billion, or 15 percent, increase in average noninterest bearing
deposits. In addition, the net interest margin increased 16 basis points to 4.85
percent. The differential between the increase in the yield on average earning
assets and the increase in the rate of interest bearing liabilities was
favorably impacted by an increase in the proportion of funding provided by
noninterest bearing deposits, thereby lowering the overall cost of funds.

Average earning assets were $26.5 billion in the first quarter of 1998,
compared with $25.4 billion in the first quarter of 1997. Most of this increase
was attributable to growth in average loans, which increased $1.4 billion, or 7
percent, and average securities, which were $237.6 million, or 10 percent,
higher, offset by a $435.2 million decrease in average federal funds sold and
securities purchased under resale agreements. Average commercial, financial and
industrial loans, which increased $1.2 billion, and average commercial mortgage
loans, which increased $335.6 million, contributed most of the loan growth. See
"Loans" on page 16 for additional commentary on growth in the loan portfolio.
The increase in primarily fixed rate securities reflected interest rate risk
management actions to reduce the Company's exposure to declines in interest
rates, and, secondarily, to increase liquidity.

The $1.1 billion, or 4 percent, growth in average earning assets from the
first quarter of 1997 to the first quarter of 1998 was funded primarily by a
$1.0 billion increase in average noninterest bearing deposits. The increase in
noninterest bearing deposits was partially due to an influx of new customer
relationships, arising from the recent merger and acquisition activities of
other financial institutions in the California market during the past year.

NONINTEREST INCOME

FOR THE THREE MONTHS ENDED
----------------------------------------------
INCREASE (DECREASE)
MARCH 31, MARCH 31, ----------------------
(DOLLARS IN THOUSANDS) 1998 1997 AMOUNT PERCENT
- --------------------------------------------------------------------- ---------- ---------- --------- -----------

Service charges on deposit accounts.................................. $ 33,026 $ 27,121 5,905 21.77%
Trust and investment management fees................................. 27,993 23,898 4,095 17.14
International commissions and fees................................... 17,631 15,079 2,552 16.92
Credit card merchant fees............................................ 14,379 13,044 1,335 10.23
Merchant banking fees................................................ 9,622 8,380 1,242 14.82
Securities gains, net................................................ 4,926 471 4,455 945.86
Foreign exchange trading gains, net.................................. 4,851 3,469 1,382 39.84
Brokerage commissions and fees....................................... 4,373 3,469 904 26.06
Other................................................................ 11,229 19,855 (8,626) (43.44)
---------- ---------- ---------
Total noninterest income........................................... $ 128,030 $ 114,786 $ 13,244 11.54%
---------- ---------- ---------
---------- ---------- ---------

In the first quarter of 1998, noninterest income was $128.0 million,
compared with $114.8 million for the same period in 1997. This increase of $13.2
million includes a $5.9 million increase in service charges on deposit accounts,
reflecting a 4 percent increase in average deposits coupled with the expansion
of several new products and services, and a $4.5 million increase in securities
gains, net. In addition, trust and investment management fees increased $4.1
million, largely due to growth of assets under management, and international
commissions and fees increased $2.6 million. These increases were partly offset
by an $8.6 million decrease in other noninterest income, primarily attributable
to an $8 million gain from the sale of a real estate-related joint venture in
1997.

NONINTEREST EXPENSE

FOR THE THREE MONTHS ENDED
------------------------------------------------
INCREASE (DECREASE)
MARCH 31, MARCH 31, ------------------------
(DOLLARS IN THOUSANDS) 1998 1997 AMOUNT PERCENT
- ----------------------------------------------------------------- ---------- ---------- ----------- -----------

Salaries and other compensation.................................. $ 119,878 $ 108,601 $ 11,277 10.38%
Employee benefits................................................ 30,505 32,187 (1,682) (5.23)
---------- ---------- -----------
Personnel-related expense...................................... 150,383 140,788 9,595 6.82
Net occupancy.................................................... 22,025 19,630 2,395 12.20
Equipment........................................................ 13,839 13,687 152 1.11
Communications................................................... 11,229 10,268 961 9.36
Credit card processing........................................... 10,080 9,722 358 3.68
Data processing.................................................. 6,502 6,423 79 1.23
Printing and office supplies..................................... 6,335 6,169 166 2.69
Professional services............................................ 6,128 4,719 1,409 29.86
Advertising and public relations................................. 6,051 6,009 42 0.70
Software......................................................... 4,440 4,729 (289) (6.11)
Travel........................................................... 3,762 3,195 567 17.75
Intangible asset amortization.................................... 3,338 3,338 -- 0.00
Armored car...................................................... 2,859 3,113 (254) (8.16)
Foreclosed asset expense (income)................................ (198) 411 (609) nm
Merger and integration expense................................... -- 6,037 (6,037) (100.00)
Other............................................................ 21,702 14,900 6,802 45.65
---------- ---------- -----------
Total noninterest expense.................................... $ 268,475 $ 253,138 $ 15,337 6.06%
---------- ---------- -----------
---------- ---------- -----------

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

nm=not meaningful

Noninterest expense was $268.5 million for the first quarter of 1998,
compared with $253.1 million for the first quarter of 1997, an increase of $15.3
million, or 6 percent. Personnel-related expense increased $9.6 million, or 7
percent, primarily due to a $5.5 million increase in performance-based incentive
compensation and a 5 percent increase in workforce to support increased revenue
growth. In addition, net occupancy expense increased $2.4 million, professional
services expense increased $1.4 million, and other noninterest expense increased
$6.8 million, partially reflecting additional expenses incurred to support
higher deposit volumes.

The combination of Union Bank and BanCal Tri-State Corporation on April 1,
1996 resulted in the recording of a total of $123.5 million in merger and
integration expense. The remaining liability balance at March 31, 1998 was $14.3
million. The balance includes amounts primarily for lease payments that are
continuing over the expected term of the leases. No merger and integration
expense was recorded in the first quarter of 1998, compared with $6.0 million in
the same quarter of 1997.

YEAR 2000

The Year 2000 issue is a computer programming situation that may affect many
electronic data processing systems. In order to minimize the length of data
fields, most computer programs eliminated the first two digits in the year date
field. This problem could affect date-sensitive calculations that treat "00" as
the year 1900, rather than 2000. Secondly, years that end in "00" are not leap
years, except for the anomaly in the year 2000. This anomaly could result in
miscalculations when processing critical date-sensitive information after
December 31, 1999.

The Company has prepared a project plan, identified all of the major
application and processing systems, and sought external and internal resources
to replace and test the systems. Purchased software and systems supported by
external parties will be tested as part of the formal project plan. In addition,
customers and vendors who have significant relationships with the Company will
be evaluated to determine

whether they are preparing for the Year 2000. The failure of those customers to
adequately prepare will be incorporated into the credit review process. However,
there can be no guarantee that the systems of vendors or customers with which
the Company does business will be completed on a timely basis.

The Company plans to complete the Year 2000 project in advance of December
31, 1999. Of the estimated total project cost of approximately $40 million, the
remaining amount to be incurred for the Year 2000 project is approximately $36
million and will be funded by normal operating cash and staffed by external
resources as well as internal staff redeployed from less time-sensitive
assignments. Approximately $10 million of the remaining cost is attributable to
the purchase of new hardware and software, which will be capitalized and
expensed over the useful lives of those assets. The remaining $27 million, which
will be expensed as incurred over the next two years, is not expected to have a
material effect on the results of operations, liquidity or capital resources.
During first quarter of 1998, the Company incurred and expensed approximately $2
million related to its assessment of the Year 2000 issue and its preliminary
efforts in implementing the Year 2000 project plan. As with all financial
institutions, there is a high degree of reliance being placed on the systems of
other institutions to properly settle transactions. Their inability to process
transactions properly or the Company's inability to complete its plan on time
could have a material adverse effect on the Company.

The cost of the project and the date on which the Company plans to complete
the Year 2000 modifications are based on managment's best estimates, which were
derived utilizing a number of assumptions of future events including the
continued availability of internal and external resources, third party
modifications and other factors. However, there can be no guarantee that these
estimates will be achieved and actual results could differ.

INCOME TAX EXPENSE

The effective tax rates for the first quarter of 1998 and 1997 were 39
percent and 41 percent, respectively. The lower effective tax rate in the first
quarter of 1998 reflects the benefits recognized from filing a California
Franchise Tax return based on the unitary concept, which incorporates the
financial results of BTM.

LOANS

The following table shows loans outstanding by loan type.

INCREASE (DECREASE)
MARCH 31, 1998 FROM
------------------------------------------
DECEMBER 31, 1997 MARCH 31, 1997
MARCH 31, DECEMBER 31, MARCH 31, -------------------- -------------------
(DOLLARS IN THOUSANDS) 1998 1997 1997 AMOUNT PERCENT AMOUNT PERCENT
- ---------------------------------------------- ----------- ------------ ----------- --------- --------- ---------- -------

Domestic:
Commercial, financial and industrial........ $10,908,882 $10,747,179 $ 9,678,762 $ 161,703 1.50% $1,230,120 12.71%
Construction................................ 270,210 293,333 331,149 (23,123) (7.88) (60,939) (18.40)
Mortgage:
Residential............................... 2,923,174 2,961,233 2,973,411 (38,059) (1.29) (50,237) (1.69)
Commercial................................ 2,971,186 2,951,807 2,650,511 19,379 0.66 320,675 12.10
----------- ------------ ----------- --------- ----------
Total mortgage.......................... 5,894,360 5,913,040 5,623,922 (18,680) (0.32) 270,438 4.81
Consumer:
Installment............................... 2,067,372 2,090,752 2,061,883 (23,380) (1.12) 5,489 0.27
Home equity............................... 934,857 992,916 1,064,357 (58,059) (5.85) (129,500) (12.17)
Credit card and other lines of credit..... 254,525 270,097 284,009 (15,572) (5.77) (29,484) (10.38)
----------- ------------ ----------- --------- ----------
Total consumer.......................... 3,256,754 3,353,765 3,410,249 (97,011) (2.89) (153,495) (4.50)
Lease financing............................. 888,846 874,860 824,325 13,986 1.60 64,521 7.83
----------- ------------ ----------- --------- ----------
Total loans in domestic offices......... 21,219,052 21,182,177 19,868,407 36,875 0.17 1,350,645 6.80
Loans originated in foreign branches.......... 1,284,991 1,559,231 1,377,647 (274,240) (17.59) (92,656) (6.73)
----------- ------------ ----------- --------- ----------
Total loans............................. $22,504,043 $22,741,408 $21,246,054 $(237,365) (1.04)% $1,257,989 5.92%
----------- ------------ ----------- --------- ----------
----------- ------------ ----------- --------- ----------

The Company's lending activities are predominantly domestic, with such loans
comprising 94 percent of the portfolio at March 31, 1998. Total loans at March
31, 1998 were $22.5 billion, an increase of

$1.3 billion, or 6 percent, from March 31, 1997. The increase was primarily
attributable to growth in the commercial, financial and industrial loan
portfolio, which increased $1.2 billion from March 31, 1997.

Commercial, financial and industrial loans represent the largest category in
the loan portfolio. These loans are extended principally to major corporations,
middle market businesses, and small businesses, with no industry concentration
exceeding 10 percent of total commercial, financial and industrial loans. At
March 31, 1998 and 1997, the commercial, financial and industrial loan portfolio
was $10.9 billion, or 48 percent of total loans, and $9.7 billion, or 46 percent
of total loans, respectively. The increase of $1.2 billion, or 13 percent, from
March 31, 1997 was primarily attributable to continued growth in loans extended
to large corporations in industries where the Bank has specialized lending
expertise.

The construction loan portfolio totaled $270.2 million, or 1 percent of
total loans, at March 31, 1998, compared with $331.1 million, or 2 percent of
total loans, at March 31, 1997.

Mortgage loans were $5.9 billion, or 26 percent of total loans, at March 31,
1998, compared with $5.6 billion, or 26 percent of total loans, at March 31,
1997. The mortgage loan portfolio consists of loans on commercial and industrial
projects and loans secured by one to four family residential properties,
primarily in California. Commercial mortgage loans increased $320.7 million from
March 31, 1997 to March 31, 1998, primarily attributable to an ongoing recovery
in the California real estate market reflecting the continuing improvement in
the West Coast economy, particularly in the real estate sector.

Consumer loans totaled $3.3 billion, or 14 percent of total loans, at March
31, 1998, compared with $3.4 billion, or 16 percent of total loans, at March 31,
1997. This portfolio is primarily comprised of installment loans and home equity
loans.

Lease financing totaled $888.8 million, or 4 percent of total loans, at
March 31, 1998, compared with $824.3 million, or 4 percent of total loans, at
March 31, 1997.

Loans originated in foreign branches totaled $1.3 billion, or 6 percent of
total loans, at March 31, 1998 and $1.4 billion, or 6 percent of total loans, at
March 31, 1997.

CROSS-BORDER OUTSTANDINGS

The Company's cross-border outstandings reflect certain additional economic
and political risks that are not reflected in domestic outstandings. These risks
include those arising from exchange rate fluctuations and restrictions on the
transfer of funds. The following table sets forth the Company's cross-border
outstandings as of March 31, 1998, December 31, 1997, and March 31, 1997 for
each country where such outstandings exceeded 1 percent of total assets. The
cross-border outstandings were compiled based upon category and domicile of
ultimate risk and are comprised of balances with banks, trading account assets,
securities available for sale, securities purchased under resale agreements,
loans, accrued interest receivable, acceptances outstanding and investments with
foreign entities. The amounts outstanding for each country exclude local
currency outstandings. The Corporation does not have significant local currency

outstandings to the individual countries listed in the following table that are
not hedged or are not funded by local currency borrowings.

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

March 31, 1998
Japan......................................................... $ 100 $ -- $ 424 $ 524
Korea......................................................... 379 1 168 548

December 31, 1997
Japan......................................................... 401 -- 438 839
Korea......................................................... 561 10 257 828
Thailand...................................................... 320 -- -- 320

March 31, 1997
Japan......................................................... 824 -- 504 1,328
Korea......................................................... 708 36 306 1,050
Thailand...................................................... 314 -- -- 314

The economic condition and the ability of some countries, to which the
Company has cross-border exposure, to manage their external debt obligations
have been impacted by the Asian economic crisis which began in the second half
of 1997. Total outstandings as of March 31, 1998 in Japan, Korea and Thailand
were $524 million, $548 million, and $194 million, and the Company's
outstandings in Indonesia, a country which continues to be affected by economic
and political turmoil, were $48 million. In light of events since year-end,
Management believes these short-term exposures can be characterized as low to
moderate risk.

Since Japan is the second largest trading nation in the world, its economic
and financial markets situation is being closely monitored. Management is also
aware that the potential impact of the Asian crisis and the depressed conditions
in Japan on the American economy and Asian companies doing business with and in
the USA, particularly California, are not yet fully understood. Accordingly, the
Company will continue to evaluate the impact that these conditions may have on
the overall portfolio throughout 1998.

Although management cannot predict the ultimate impact of the crisis on the
Company's financial position and results of operations since much depends on the
effect of the stabilizing activities already under way, management believes that
the continuation of internal supervision, monitoring and portfolio risk
management practices will be effective in minimizing the impact over and above
that already identified. Increases in nonaccrual loans, together with some
related increases in charge-off activity, may occur as events unfold.

ALLOWANCE FOR CREDIT LOSSES

The allowance for credit losses is maintained at a level considered
appropriate by management and is based on an ongoing assessment of risk in the
credit and lease portfolio, including commitments to provide financing. The
allowance is increased by the provision for credit losses, which is charged
against current period operating results, and is decreased by the amount of net
loans charged off during the period. In evaluating the adequacy of the allowance
for credit losses, management incorporates such factors as collateral value,
portfolio composition and concentration, and trends in local, national, and
international economic conditions and the related impact on the financial
strength of the Company's borrowers. While the allowance is segmented by broad
portfolio categories to analyze its adequacy, the allowance is general in nature
and is available for the portfolio in its entirety. Although management believes
that the allowance for credit losses is adequate in the first quarter of 1998,
future provisions will be subject to continuing evaluation of risk in the credit
and lease portfolio.

The table below sets forth a reconciliation of changes in the allowance for
credit losses.

FOR THE THREE MONTHS
ENDED
----------------------
MARCH 31, MARCH 31,
(DOLLARS IN THOUSANDS) 1998 1997
- ------------------------------------------------------------------------------------------ ---------- ----------

Balance, beginning of period.............................................................. $ 451,692 $ 523,946
Loans charged off:
Commercial, financial and industrial.................................................. 3,988 5,175
Construction.......................................................................... 3 --
Mortgage.............................................................................. 814 1,888
Consumer.............................................................................. 12,438 12,539
Lease financing....................................................................... 657 969
---------- ----------
Total loans charged off............................................................. 17,900 20,571
Recoveries of loans previously charged off:
Commercial, financial and industrial.................................................. 7,745 7,540
Construction.......................................................................... 3 6,891
Mortgage.............................................................................. 528 1,474
Consumer.............................................................................. 3,895 3,481
Lease financing....................................................................... 77 74
---------- ----------
Total recoveries of loans previously charged off.................................... 12,248 19,460
---------- ----------
Net loans charged off............................................................. 5,652 1,111
Provision for credit losses............................................................... 20,000 --
Foreign translation adjustment and other net additions.................................... 3 --
---------- ----------
Balance, end of period.................................................................... $ 466,043 $ 522,835
---------- ----------
---------- ----------
Allowance for credit losses to total loans................................................ 2.07% 2.46%
Provision for credit losses to net loans charged off...................................... 353.86 --
Recoveries of loans to loans charged off in the previous period........................... 33.84 53.80
Net loans charged off to average loans outstanding for the period(1)...................... 0.10 0.02

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

(1) Annualized.

At March 31, 1998, the Company's allowance for credit losses was $466.0
million, or 2.07 percent of total loans, and 414.4 percent of total nonaccrual
loans, compared with an allowance for credit losses at March 31, 1997 of $522.8
million, or 2.46 percent of total loans, and 382.6 percent of total nonaccrual
loans.

During the first quarter of 1998, the Company recorded $20.0 million in
provision for credit losses, compared with no provision for credit losses in the
first quarter of 1997. This resulted from management's regular quarterly
assessment of overall credit quality, loan growth and economic conditions in
relation to the level of the allowance for credit losses. Future quarterly
provisions will be subject to the same evaluation process.

During the first quarter of 1998, net loans charged off were $5.7 million,
compared with $1.1 million in the first quarter of 1997. Loans charged off in
the first quarter of 1998 decreased by $2.7 million primarily due to a $1.2
million decrease in commercial, financial and industrial loans charged off and a
$1.1 million decrease in mortgage loans charged off. Recoveries of loans
previously charged off decreased by $7.2 million, and the percentage of current
year recoveries to loans charged off in the previous quarter decreased from
53.80 percent in the first quarter of 1997 to 33.84 percent in the first quarter
of 1998.

The Company evaluates its loan portfolio for impairment as defined by SFAS
No. 114, "Accounting by Creditors for Impairment of a Loan" as amended. At March
31, 1998, total impaired loans were $111.5 million, and the associated
impairment allowance was $18.3 million, compared with total impaired loans of
$124.6 million and an associated impairment allowance of $14.6 million at March
31, 1997.

NONPERFORMING ASSETS

MARCH 31, DECEMBER 31, MARCH 31,
(DOLLARS IN THOUSANDS) 1998 1997 1997
- ------------------------------------------------------------------------------ ---------- ------------ ----------

Commercial, financial and industrial.......................................... $ 65,540 $ 46,392 $ 70,778
Construction.................................................................. 4,389 4,071 5,009
Mortgage:
Residential................................................................. 951 954 3,244
Commercial.................................................................. 41,571 57,921 57,636
---------- ------------ ----------
Total mortgage............................................................ 42,522 58,875 60,880
---------- ------------ ----------
Total nonaccrual loans.................................................... 112,451 109,338 136,667
Foreclosed assets............................................................. 19,952 20,471 30,378
---------- ------------ ----------
Total nonperforming assets................................................ $ 132,403 $ 129,809 $ 167,045
---------- ------------ ----------
---------- ------------ ----------
Allowance for credit losses................................................... $ 466,043 $ 451,692 $ 522,835
---------- ------------ ----------
---------- ------------ ----------
Nonaccrual loans to total loans............................................... 0.50% 0.48% 0.64%
Nonaccrual loans to allowance for credit losses............................... 24.13 24.21 26.14
Nonperforming assets to total loans and foreclosed assets..................... 0.59 0.57 0.79
Nonperforming assets to total assets.......................................... 0.43 0.42 0.57

At March 31, 1998, nonperforming assets totaled $132.4 million, a decrease
of $34.6 million, or 21 percent, from a year earlier. The decrease was primarily
the result of reductions of $5.2 million in nonaccrual commercial, financial and
industrial loans, mostly from loans to large corporate borrowers; $16.1 million
in nonaccrual commercial mortgage loans due to a combination of note sales,
repayments and restorations to accrual; and, $10.4 million in foreclosed assets.

Nonaccrual loans as a percentage of total loans were 0.50 percent at March
31, 1998, compared with 0.64 percent at March 31, 1997. Nonperforming assets as
a percentage of total loans and foreclosed assets were 0.59 percent at March 31,
1998, compared with 0.79 percent at March 31, 1997.

LOANS 90 DAYS OR MORE PAST DUE AND STILL ACCRUING

MARCH 31, DECEMBER 31, MARCH 31,
(DOLLARS IN THOUSANDS) 1998 1997 1997
- ---------------------------------------------------------------------------- ----------- ------------ -----------

Commercial, financial and industrial....................................... $ 1,159 $ 450 $ 4,419
Construction............................................................... -- -- 5,081
Mortgage:
Residential............................................................. 8,886 10,170 10,952
Commercial.............................................................. 404 1,660 13,742
----------- ------------ -----------
Total mortgage........................................................ 9,290 11,830 24,694
Consumer and other......................................................... 7,500 7,712 11,865
----------- ------------ -----------
Total loans 90 days or more past due and still accruing............... $ 17,949 $ 19,992 $ 46,059
----------- ------------ -----------
----------- ------------ -----------

LIQUIDITY

Liquidity refers to the Company's ability to adjust its future cash flows to
meet the needs of depositors and borrowers and to fund operations on a timely
and cost-effective basis. The Company's liquidity management draws upon the
strengths of its extensive retail and commercial market business franchise,
coupled with its ability to obtain funds for various terms in a variety of
domestic and international money markets.

Core deposits provide the Company with a sizable source of relatively stable
and low-cost funds. In the first quarter of 1998, lower cost sources of funds,
which include noninterest bearing deposits and interest bearing core deposits,
funded 63 percent of average earning assets. Most of the remaining funding was
provided by short-term borrowing in the form of negotiable certificates of
deposit, foreign deposits, federal funds purchased and securities sold under
repurchase agreements, commercial paper, and other borrowings.

REGULATORY CAPITAL

The following table summarizes risk-based capital, risk-weighted assets, and
risk-based capital ratios for the Company.

MINIMUM
MARCH 31, DECEMBER 31, MARCH 31, REGULATORY
(DOLLARS IN THOUSANDS) 1998 1997 1997 REQUIREMENT
- ---------------------------------------- ------------ -------------- ------------ -----------

CAPITAL COMPONENTS
Tier 1 capital.......................... $ 2,663,753 $ 2,587,071 $ 2,467,312
Tier 2 capital.......................... 604,145 601,102 458,135
------------ -------------- ------------
Total risk-based capital................ $ 3,267,898 $ 3,188,173 $ 2,925,447
------------ -------------- ------------
------------ -------------- ------------
Risk-weighted assets.................... $ 29,094,505 $ 28,862,340 $ 26,963,265
------------ -------------- ------------
------------ -------------- ------------
Quarterly average assets................ $ 29,795,772 $ 30,334,507 $ 28,702,616
------------ -------------- ------------
------------ -------------- ------------
CAPITAL RATIOS
Total risk-based capital................ 11.23% 11.05% 10.85% 8.0%
Tier 1 risk-based capital............... 9.16 8.96 9.15 4.0
Leverage ratio (1)...................... 8.94 8.53 8.60 4.0

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

(1) Tier 1 capital divided by quarterly average assets (excluding intangible
assets).

The Company and the Bank are subject to various regulations issued by
Federal banking agencies, including minimum capital requirements. The Company
and the Bank are required to maintain minimum ratios of total and Tier 1 capital
to risk-weighted assets and of Tier 1 capital to average assets (the leverage
ratio).

Compared with one year earlier, the Company's Tier 1 risk-based capital
ratio at March 31, 1998 increased 1 basis point to 9.16 percent, the total
risk-based capital ratio increased 38 basis points to 11.23 percent, and the
leverage ratio increased 34 basis points to 8.94 percent. The increase in the
Tier 1 risk-based capital ratio was attributable to retained earnings growing
faster than risk-weighted assets, partly offset by the redemption of $135.0
million of preferred stock in the third quarter of 1997. The increase in the
total risk-based capital ratio was attributable to the issuance of $200.0
million in subordinated capital notes in the second quarter of 1997.

As of March 31, 1998, management believes the capital ratios of the Bank met
all regulatory minimums of a "well-capitalized" institution.

ITEM 3. MARKET RISK.

The Company's exposure to market risk is discussed on pages 46-49 of the
December 31, 1997 annual report to shareholders.

PART II. OTHER INFORMATION

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

(a) Exhibits Index:

NO. DESCRIPTION
--- -----------------------
27 Financial Data Schedule

(b) Reports on Form 8-K: None

SIGNATURES

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

UNIONBANCAL CORPORATION
(Registrant)

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

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

Dated: November 19, 1998