JP Morgan, the US investment bank, has announced a £237 million deal with Canary Wharf Group to develop a building in the London financial district, according to a Financial Times report.

The bank has bought a 999-year lease on a development called Riverside, which could take up 1.9 million square feet, almost 10 per cent of the Canary Wharf site.

Work has already begun on the infrastructure of the building, which is expected to be finished in four to five years, but JP Morgan has not yet finalised the design of the building.

Canary Wharf Group remains in talks with Nomura after the Japanese bank indicated that it would like to move to the former Lehman Brothers premises in the City of London, after it acquired parts of the US bank this year.

Canary Wharf resident Bank of America, which is expected to complete its takeover of Merrill Lynch by the end of the year, has yet to reveal if it will move from the area and into the City.

Dan Bayley, head of UK office agency at Atisreal, the broker, said: “This is good news, if only because banks wouldn’t be building anywhere if they feared a cataclysmic medium-term meltdown.”

If building on the Riverside South development is postponed or cancelled, Canary Wharf Group would be paid for work done and retain £76 million.