Members Equity Bank is seeking A$350 million in capital over three years from its industry super fund shareholders, which will lift its capital base towards the $900 million mark.Taking into account $80 million in capital invested in August 2010, and the refinancing of some tier two capital, industry super funds will have had to increase their commitment to their banking associate by a factor of three since the financial crisis hit in 2008.The industry super funds have broadly committed to the latest fundraising, which is needed to support the gradual transfer of off-balance sheet assets to the bank balance sheet over the coming years. The bank's chief financial officer, Nick Vamvakas, sketched out the capital requirements of the bank in a briefing on the bank's annual report, which was published recently.ME Bank has more than $16 billion in home loans under management according to the Australian Prudential Regulation Authority, though less than half of these are consolidated on the balance sheet of the bank at present.Now in its twelfth year of trading, ME Bank reported an increase of 70 per cent in net profit to $26 million in the year to June 2011. The bad debt expense was slightly lower, at $4.5 million.The return on equity for the bank in the 2011 financial year was around 6.5 per cent, which is only half the target ROE of the listed regional banks.ME Bank's board is aiming for a return on equity of 10 per cent over the coming years in order to meet targets agreed with the industry super funds that own the bank.Industry super funds now own shares in ME Bank directly once again. This follows a reversal, effective from July 2011, of the holding company structure adopted in 2007 by Industry Super Holdings (ISH) for its investments in the bank.The financial crisis raised doubts in the minds of the directors of ISH and the bank, with prodding from the Australian Prudential Regulation Authority, over the merit of this earlier approach.According to the annual review of Industry Super Holdings, "the board formed the view that removing ME Bank from the group would have a positive impact on the capital, and possibly liquidity, imposed upon the bank by APRA."The demerger of the bank from the holding company produced some complexity, with a second special meeting of shareholders required in the final weeks of the financial year to adopt a modified plan that provided relief from capital gains tax.The ISH review also concedes that any scale economies that were supposed to flow from a conglomerate structure were not realised over the last four years "as it became apparent that the operations of the entities in the group had become much more specialised."The bank's activities have also become constrained over the years since the financial crisis hit.ME Bank's market share of home loans, measured as a proportion of all bank lending, peaked in May 2006, at 2.30 per cent. Its market share fell to 1.5 per cent at June 2011, and ME Bank