ANZ hopes to find new banking acquisitions in Asia, as European and North American banks sell their overseas assets to prop up troubled domestic operations.Speaking at the presentation of the bank's full-year profit for 2011 yesterday, ANZ chief executive Mike Smith laid out his acquisition strategy. His renewed search comes two years after the ANZ negotiated the purchase of a portfolio of businesses from Royal Bank of Scotland in six Asian markets."If you look at a number of European banks and actually some of the US banks, when you are trading at 0.3 times or 0.4 times [book value] it is extremely difficult to raise capital in that environment."The easiest way to do it is by reducing your balance sheet or selling assets, and we are already seeing opportunities where portfolios are being offered for sale."Smith said some international banks were effectively pulling out of Asia by curtailing lending.There were "constraints of the balance sheet" affecting competitors, Smith said. "The players will leave the field, they are just not playing."Smith argued that this was "exactly what happened in 2008, and so this is a huge opportunity."ANZ faces its own constraints, though they are not as complicated as those facing some rivals.Smith noted trading challenges, including an abundance of very short-term funding flows, Standard & Poor's critical review of bank credit ratings, and the loss of liquidity in credit markets over August and September.The latter was a short-term blow to ANZ, which earned scarcely any trading income from its own investments in interest rate markets over the September 2011 quarter. That trading result took some gloss off yesterday's announcement of a A$5.4 billion full-year profit.One reason for the lack of income was management reticence over the appropriate trading opportunities, though trading income in October was close to "normal", according to Smith.Managing the bank's liabilities is a persistent problem, given the preference of its counterparties - many of them highly rated corporates and other banks - to invest funds for only 24 hours."Because, obviously, of concerns with the safety issue, the problem has been that within this market we have had a huge inflow of short-term funds," Smith said."Forty-eight hours is the new 20 years," he quipped. "It's been extremely difficult for us.  "We've had a huge amount of liquidity coming through, but it's what to do with it. "I think we've got about $14 billion at the moment which is not earning us a lot."ANZ has sourced a lot of this through its New York office and has invested with the US Federal Reserve, with another large block of excess liquidity from Asia being invested with the Bank of Japan.While the margins on these liquid assets are narrow, the return on assets is high, since the capital required to support these assets is minimal.Smith said ANZ's institutional business was "trying to thin that out a bit and use it for funding and trade finance", with growth in trade finance from ANZ's Asian operations playing a part in meeting that goal.The bank's