(Adds quote from finance minister; background)
DUBLIN, June 12 (Reuters) - Shares in Allied Irish Banks (AIB) will be priced at between 3.90 and 4.90 euros when a 25 percent stake is floated in Dublin and London, valuing the state-owned lender at up to 13.3 billion euros ($14.9 billion), Ireland's finance ministry said in a statement.
The initial public offering is set to be one of Europe's largest share listings by a bank since the 2008 financial crisis. It could raise up to 3.8 billion euros assuming full exercise of the offering's over-allotment option.
The Finance Ministry said the long long-awaited sale of a 25 percent stake in the state-owned lender was still on track despite the Conservative party losing its majority in the UK election on Thursday.
Finance Minister Michael Noonan had previously said the price could be driven up if the party, which still won the most seats, won a strong majority in Thursday's election.
"Market conditions remain favorable and I am encouraged by the strong level of interest shown by investors in the offering to date," Noonan said in a statement.
Dublin rescued the bank in a 21 billion-euro taxpayer bailout that began in early 2009, and it has been considering partly cashing out of its 99.9 percent stake since last year.
One of Ireland's two dominant banks, AIB returned to profit three years ago. It has cut its huge stock of impaired loans by more than two-thirds since then, and this year it became the first domestically owned lender to restart dividends since the crash.
AIB will list its shares on the Irish and London stock exchanges and seek admission to the main markets of each. The government said the sale was expected to be one of the UK's largest main market IPOs of the last 20 years.
AIB is less exposed to Britain's departure from the EU than its bigger rival, Bank of Ireland, having made just 14 percent of its pre-provision operating profit in the United Kingdom last year. ($1 = 0.8929 euros) (Reporting by Conor Humphries; Editing by Greg Mahlich)