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2016-11-10

Eurocastle Investment Limited: Eurocastle Announces Financial Results for the Nine Months Ended 30 September 2016

Guernsey, 10 November 2016 - Eurocastle Investment Limited (Euronext
Amsterdam: ECT)todayhas released its financial results for the nine months
ended 30 September 2016.

Normalised FFO
[1]of €11.9 million, or €0.20 per share[2]for the third quarter of 2016. €33.5
million or €0.49 per share for the nine months ended 30 September 2016.

Adjusted Net Asset Value
[3]of €463.5 million, or €7.71 per share, an increase of €0.01 per share on
the quarter (Q2 2016: €462.7 million, or €7.70 per share) reflecting €0.20
per share of valuation movements before Q3 dividend of €0.125 per share and
corporate expenses.

Third Quarter 2016 Dividend
of €7.5 million, or €0.125 per share paid in October.

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| Q3 2016 Q2 2016 YTD Q3 2016 YTD Q3 2015 |
| € million € per share € million € per share € million € per share € million € per share |
| Normalised FFO1 11.9 0.20 11.0 0.18 33.5 0.49 9.0 0.16 |
| Legacy Business4Cash Flow Received 2.1 0.04 0.4 0.01 6.9 0.10 60.6 1.10 |
| Adjusted NAV3 463.5 7.71 462.7 7.70 463.5 7.71 528.3 7.30 |
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BUSINESS HIGHLIGHTS SINCE 30 JUNE 2016

doBank
- In October, following approval from the Bank of Italy, doBank (50% owned by
Eurocastle) successfully completed the acquisition of Italfondiario S.p.A.
("Italfondiario"), the second largest independent non-performing loan
servicer in Italy. Together, doBank and Italfondiario will represent the
largest independent banking group in Italy, specialising in the credit
management and collection of performing and non-performing loans with over
€83 billion gross book value ("GBV") of loans under management, and over
4,000 employees and external consultants across 24 offices in Italy. This
acquisition is a major milestone in doBank's expansion in the Italian market
which significantly strengthens its position as a leading partner to the
Italian banking system.

New Italian Investments
- Eurocastle acquired a 25% interest in two portfolios of Italian
non-performing loans ("NPLs") with an aggregate GBV of approximately €70
million. The first investment of €1.1 million was made on 23 September 2016,
while the second acquisition where the Company invested a further €1.0
million closed on 9 November 2016. The two portfolios are predominantly
secured by residential real estate.

Italian Investments5 Performance
- During the third quarter, Italian Investments reported strong performance
generating in aggregate €9.0 million of gross cash flow. Total cash flow
generated for the nine months ended 30 September 2016 amounted to €40.3
million6of which €26.6 million related to doBank's NPL portfolio and
servicing business. Since acquisition, Italian Investments have generated
€93.7 million, or €7.0 million more than underwriting expectations.

Legacy Business
- In line with its strategy to accelerate recoveries from its legacy real
estate assets in Germany, the Company agreed to sell Belfry and Truss, the
two remaining Retail portfolios. The sale is expected to generate €2.3
million of net proceeds compared to a reported Adjusted NAV of zero. The
majority of the assets sold are expected to close by year-end.

ADDITIONAL INFORMATION

For additional information that management believes to be useful for
investors, please refer to the latest presentation posted on the Investor
Relations section of the Company's website, www.eurocastleinv.com. For
consolidated investment portfolio information, please refer to the Company's
most recent Financial Report, which is available on the Company's website
(www.eurocastleinv.com).

EARNINGS CALL INFORMATION

Eurocastle's management will host an earnings conference call at 2:00 P.M.
London time (9:00 A.M. New York time) later today. All interested parties are
welcome to participate on the live call. You can access the conference call
by dialing first +1- 800-215-5243 (from within the U.S.) or +1-330-863-8154
(from outside of the U.S.) ten minutes prior to the scheduled start of the
call; please reference "Eurocastle Third Quarter 2016 Earnings Call" or
conference ID number "3334554".

A webcast of the conference call will be available to the public on a
listen-only basis at www.eurocastleinv.com. Please allow extra time prior to
the call to visit the site and download the necessary software required to
listen to the internet broadcast. A replay of the webcast will be available
for three months following the call.

For those who are not available to listen to the live call, a replay will be
available until 11:59 P.M. New York time on Saturday, 10 December 2016 by
dialling +1-855-859-2056 (from within the U.S.) or +1-404- 537-3406 (from
outside of the U.S.); please reference access code "3334554".
NORMALISED FFO

Normalised FFO is a non-IFRS financial measure that, with respect to the
Company's Italian Investments, recognises income on an expected yield basis
allowing Eurocastle to report the run rate earnings from these investments in
line with their projected annualised returns. On Eurocastle's Legacy Business
the measure excludes realised gains and losses, sales related costs
(including realised swap losses), impairment losses, foreign exchange
movements and any movements on portfolios with a negative NAV other than
sales or asset management fees realised.

Eurocastle believes that, given the strategy of seeking to monetise the
residual value of the Legacy Business, focusing on the Normalised FFO of the
Company's Italian Investments will enhance investor's understanding of
current and future earnings given annualised returns achieved and the average
net invested capital[4]over the relevant period.

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| Segmental Normalised FFO for the Nine Months Ended 30 September 2016 Average Net Yield Italian Investments Legacy Total |
| |
| Invested Capital |
| € Thousands € Thousands € Thousands |
| NPLs 22,462 20% 3,399 - 3,399 |
| RE Fund Units 43,873 34% 11,335 - 11,335 |
| doBank (Servicer&NPL) 246,031 14% 25,630 - 25,630 |
| Italian Investments NFFO before expenses 312,366 17% 40,364 - 40,364 |
| Legacy Portfolios NFFO before expenses - 7,785 7,785 |
| Manager Base&Incentive Fees (8,621) (99) (8,720) |
| Other operating expenses (3,125) (2,849) (5,974) |
| Normalised FFO 28,618 4,837 33,455 |
| Per Share 0.42 0.07 0.49 |
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--------------------------------------------------------------------------------------------------------------------------------
| Segmental Normalised FFO for the Third Quarter 2016 Average Net Yield Italian Investments Legacy Total |
| |
| Invested Capital |
| € Thousands € Thousands € Thousands |
| NPLs 21,863 19% 1,053 - 1,053 |
| RE Fund Units 47,737 45% 5,412 - 5,412 |
| doBank (Servicer&NPL) 246,031 14% 8,560 - 8,560 |
| Italian Investments NFFO before expenses 315,631 19% 15,025 - 15,025 |
| Legacy Portfolios NFFO before expenses - 1,638 1,638 |
| Manager Base&Incentive Fees (3,080) (30) (3,110) |
| Other operating expenses (1,395) (259) (1,654) |
| Normalised FFO 10,550 1,349 11,899 |
| Per Share 0.18 0.02 0.20 |
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In the first nine months of 2016, Eurocastle generated Normalised FFO of €33.5
million, or €0.49 per share compared to a dividend of €24.1 million, or
€0.375 per share. Before corporate costs Italian Investments generated €40.4
million, or €0.59 per share. Given the average net invested capital in the
period was approximately €312 million, this equates to a yield of 17%.

In the third quarter of 2016, Eurocastle generated Normalised FFO of €11.9
million, or €0.20 per share. Before corporate costs Italian Investments
generated €15.0 million, or €0.25 per share. Given the average net invested
capital in the period was approximately €316 million, this ...

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