According to Rod Kent, trading in sub-prime products has cost the bank over $600 million since the collapse of the sector last summer.
The comments were made as B&B announced a further $160 million in write-downs due to the ongoing financial crisis.
Nevertheless, the bank also said that its core tier-one capital ratio (a key indicator of future growth) stood at 7.7 per cent - ahead of most domestic rivals.
The chairman said: "With the benefit of hindsight we wish, of course, that we hadn't invested in those assets and with the benefit of hindsight again, this was a mistake which we clearly regret."
He added that he and the rest of the B&B board were "deeply regretful and indeed sorry" that they had acted "like lemmings" in buying the sub-prime derivatives.
Mr Kent made the comments at the bank's annual general meeting in Bradford, England.