Asian bank executives are fixated on retail banking. That’s where the big money is, they say, because as living standards improve in Asia, more and more consumers need banks to help them manage their financial affairs.

Retail banking may be the cool new thing for some Asian financial institutions, but they risk losing out on a big source of potential profit from its underperforming counterpart, corporate banking. While it may be mundane and long in the tooth, corporate banking accounts for 60 to 70 percent of their asset base; in other words, this is their main business. And it is likely to stay so because the vast majority of commercial borrowers in Asia—corporate, midsize, and small businesses—will remain dependent on banks for financial capital and transactional and risk-management services. Alternative sources of debt financing have been slow to develop, and only the top corporations in Asia have access to them. In short, when it comes to serving the financial needs of companies in the region, Asian banks are the natural owners.

Instead, the region’s banks have been pouring money into retail marketing budgets, product development, and customer relationship management. The reality is that few banks can build scale and...