Bank of Cyprus, the east Mediterranean island's largest lender, on Friday posted a 29-million-euro ($32-million) post-tax profit in the first quarter.

Profit after tax attributable to the owners of the bank compares with a loss of 337 million euros in the last quarter of 2014.

BoC said it had reduced emergency liquidity assistance (ELA) in Q1 by 500 million euros to 6.9 billion euros at March 31 2015, with a further reduction to 6.4 billion euros as of May 29.

"Depending on market conditions and investor appetite, the bank will assess the possibility of raising wholesale funding, with the proceeds of such funding used to reduce ELA," CEO John Patrick Hourican said in a statement.

"The Cyprus economy is showing further signs of stabilisation amidst a relatively unfavourable external environment... recording its first quarter of positive economic growth following fourteen consecutive quarters of negative economic growth," he added.

In March 2013, Cyprus clinched a 10-billion-euro ($13 billion) loan from the European Union and International Monetary Fund to bail out its troubled economy and oversized banking system.

Under the terms of the deal, the government was required to close the island's second-largest bank, Laiki, and impose a 47.5 percent haircut on deposits above 100,000 euros at BoC.

The bank has since undergone major restructuring, which included absorbing the good assets of the former Laiki Bank.

Hourican said the adoption by parliament of controversial foreclosure legislation and insolvency framework is a "significant step" in enabling the bank to tackle bad loans and improve asset quality.

BoC said customer deposits totalled 13.611 billion euros at March 31, compared with 13.169 billion euros at December 31 2014.

Loans in arrears for more than 90 days totalled 12.789 billion euros at March 31, and accounted for 53 percent of gross loans.Economy:

Loss from disposal/discontinued operations for Q1 was 21 million euros, of which a loss of 20 million euros was related to the bank's Russian operations.

Underlining its comeback, the bank resumed trading on the stock exchange in mid-December after an 18-month absence since the bailout, which saw its larger depositors hit by a 47.5 percent haircut.

Last August, BoC successfully raised 1 billion euros from private investors, including US billionaire Wilbur Ross who was voted in as vice chairman last week with former Deutsche Bank boss Josef Ackermann as the new chairman.