Egypt's EFG Hermes and Qatar's QInvest are in talks to create what could become one of the Middle East's largest investment banks, at a time when the region's wider financial industry is under pressure to consolidate due to falling profits.

The two financial groups are exploring "a potential strategic alliance" whose aim is to "create a leading investment bank with operations in the Arab world and beyond," according to a joint statement issued on Monday. The new investment bank would have operations across the Middle East, Africa, Turkey, and South and South East Asia.