“I would rather participate as the government is selling down,” Mr McEwan, 58, told investors at a conference in London yesterday.
“It’s probably the best thing for all investors, where excess capital goes back through buybacks.”
UK chancellor George Osborne raised £2.1bn (€2.85bn) selling the first portion of RBS shares in August, even though it came at a loss on Britain’s bailout of the Edinburgh-based lender at the height of the financial crisis.
Mr McEwan plans to return capital to shareholders from early 2017, using funds generated from asset disposals as the bank focuses on UK and Irish consumer lending.
Mr McEwan said RBS could follow AIG, which bought shares to cut the US government’s stake after requiring a bailout in 2008. The UK owns 72.9% of RBS.
“You’ve seen very good examples of that in the marketplace,” Mr McEwan said.
“AIG did the same, where the government sold out, and that worked successfully.”
The CEO said RBS is on-course to reduce costs by about £850m in 2015.
That would exceed a target given in July by £50m because of the bank levy, according to Mr McEwan. The bank is “on-track to deliver” all of its targets, he added.