Metro Bank’s chief executive will give up an annual bonus that was previously worth £800,000 following a major accounting mistake that is now under investigation by City regulators.

Craig Donaldson told the Guardian that he offered to resign after the mistake came to light, but will be staying after gaining the full support of the bank’s board, which is chaired by its American founder Vernon Hill.

“I have offered to resign and the board have been very supportive, and I have actually asked that I’ll waive my bonus this year in response to what’s happened,” Donaldson said.

The CEO did not confirm the size of his forgone 2018 bonus, which is expected to be detailed in the bank’s annual report next month, but Donaldson took home a hefty bonus of £800,000 for 2017, which made up a bigger portion of his £1.5m pay package than his £650,000 salary.

The lender has been in the spotlight after an accounting blunder in January sent its shares plunging by 50%. Hundreds of millions of pounds of commercial property loans and loans to commercial buy-to-let operators had been wrongly classified in risk terms and should have been among its “risk-weighted assets” (RWAs). The bank originally suggested it had discovered the issue itself, but it later emerged that the error was caught by the UK regulator.

Within days of the disclosure on 23 January, the bank’s stock price fell from about £22 per share to a record low of £10.87, before recovering.

The share price went into reverse again on Tuesday after the new fundraising plan was announced, closing down nearly 16% at £13.

Donaldson said during a call with analysts that he “deeply” regretted the adjustments and acknowledged the executive team “did not deliver the standards” that should be expected of the bank. “The buck stops with me and I am sorry about that,” he said.

The bank confirmed that City regulators, the Financial Conduct Authority and the Prudential Regulation Authority, intended to investigate the circumstances that led to the accounting failure.

News of Donaldson’s scrapped bonus came as Metro Bank announced it was again going cap in hand to shareholders to try to raise a further £350m

The challenger bank raised £303m from investors last July and Donaldson then ruled out further cash calls to fuel the lender’s growth. However, Metro Bank announced on Tuesday that it planned another equity sale in the first half of 2019 after consulting shareholders.

Founded in 2010, Metro Bank brought forward its full year earnings results by a day to Tuesday, reporting pre-tax profits up 130% on an underlying basis to £36.6m, slightly below consensus estimates of £39m.

Donaldson said 2018 was a “successful year of strong growth despite a challenging operating environment”.