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UnionBanCal Corporation to Exit the Indirect Automobile Lending Business

14 September 2000

UnionBanCal Corporation to Exit the Indirect Automobile Lending Business

    SAN FRANCISCO--Sept. 14, 2000--UnionBanCal Corporation today announced that effective September 22, 2000, it will no longer originate automobile loans through its dealer relationship network. Currently, the Bank has an indirect automobile loan portfolio of approximately $1 billion. This portfolio will wind down over the next four years, as existing loans are repaid.
    The Bank will remain active in the indirect auto leasing business and continue generating direct auto loans through its branches.
    The decision to exit indirect auto lending arose from a special companywide strategic planning process, which is expected to conclude later this year. The strategic analysis concluded that indirect auto lending does not provide a satisfactory risk-adjusted return on capital and that the capital dedicated to the business can be invested more productively in other bank activities.
    A charge of approximately $1.0 million (pre-tax) will be recorded in the third quarter of 2000 to recognize severance expenses related to staff eliminations.
    The effect on earnings per share in the fourth quarter of 2000 is expected to be neutral, and modestly additive for full year 2001, as a result of redeployment of capital into higher return activities.
    Based in San Francisco, UnionBanCal Corporation is a bank holding company with assets of $33.9 billion at June 30, 2000. Its primary subsidiary is Union Bank of California, N.A., the third largest commercial bank in California, and among the 30 largest banks in the United States. Union Bank of California, N.A. has 241 banking offices in California, 6 banking offices in Oregon and Washington and 18 international offices.
    The following appears in accordance with the Private Securities Litigation Reform Act: This press release includes forward-looking statements that involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those in the forward-looking statements. Those factors include fluctuations in interest rates, government regulations, and economic conditions and competition in the geographic and business areas in which the Corporation conducts its operations. For additional information regarding UnionBanCal Corporation, including a discussion of related risk factors, please refer to the Corporation's public filings with the Securities and Exchange Commission which are available by calling 415/765-2969 or online at http://www.sec.gov.