SAN FRANCISCO - As it wraps up a companywide cost-cutting program, Unionbancal Corp. is confronting the question of how it will expand outside a core weighted heavily in favor of commercial banking.

The $33.6 billion banking company, which is mostly owned by Bank of Tokyo-Mitsubishi Ltd., said its board should complete a strategic review intended to answer this question by the end of October. A decision on the company's direction has been delayed for the last several months as its main subsidiary, San Francisco-based Union Bank of California, implemented a cost-cutting/revenue-building program - Mission Excel.

About 1,400 jobs, or 15% of the work force, have been cut since the program was introduced in March 1999. First-quarter noninterest expenses fell 11.3% from the year-earlier period.

"Mission Excel created a solid foundation," said Takahiro Moriguchi, president and chief executive officer, in an interview. "This strategic planning is an attempt to set a direction on that foundation."

Consultants are helping Unionbancal's 20-member board in the strategic review, which involves exploring ways to enhance its core businesses and whether to discontinue some of the less profitable ones.

The decisions to come out of the review will steer acquisition activity - something the company has stayed clear of since Union Bank's 1996 merger with Bank of California. Mitsubishi Bank bought Bank of California in 1984.

And the answers are important for the bank, the second-largest headquartered in California.

One goal already set is to diversify revenue sources to make Unionbancal less reliant on lending. Noninterest income accounted for only 30% of its first-quarter revenues, and fund management - one of the fastest-growing and most lucrative fee-generating businesses - still trails deposit accounts as a revenue producer.

Mr. Moriguchi said the primary growth in this area should be from asset management and institutional trust, but the company is cautious about expanding its asset management operation, which includes the investment advisor HighMark Capital Management Inc.

"Fund management is tough. We have to say why we're doing this," Mr. Moriguchi said. He added that there is more of an opening for the bank on the trust, processing, and custody sides of the securities business.

Acquisitions will probably wait until the strategic review is completed - unless an opportunity surprises the bank beforehand.

But the company says it has no interest in buying any units that Bay View Capital in San Mateo, Calif., just put on the auction block.

While analysts support Unionbancal's cost-cutting efforts, the company is still far short of one of Mission Excel's main goals - shoring up its stock.

"They've expressed interest in expanding, but they haven't had a strong currency," said Joseph K. Morford, an analyst at Dain Rauscher Wessels in San Francisco.

To go with the cost-reduction campaign, the company introduced a secondary stock offering of 28.75 million shares and then repurchased $312 million if them, listed its stock on the New York Stock Exchange, and increased its dividend by 30%, to 25 cents per share.

Unionbancal share price bounced for a while - rising 43% from March 1999 to November, when it reached $46.4375. It has since retreated and closed at $33.9375 Wednesday.

Company executives acknowledge that their stock price could be better. But without Mission Excel, it would be even worse, they say.

Many investors are uncomfortable with the presence of a large minority shareholder. But Bank of Tokyo-Mitsubishi for now is content to have a profitable .S. subsidiary that also gives it a toehold in the U.S. economy.

In fact, as part of Bank of Tokyo's own restructuring last year, Unionbancal was separated from Bank of Tokyo's other seven other global business units. And last month, several members of Unionbancal's board visited Bank of Tokyo-Mitsubishi management to discuss the Japanese banking giant's strategy and market position.

Those moves point to stability, said Mr. Moriguchi, who maintains that his company "hasn't had any interest in reducing its ownership stake" in Unionbancal.

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