The number of new jobs created in the City of London fell by 8% last month to 2,390, down from 2,610 in April, according to a study.
Financial services recruitment firm Astbury Marsden said the figure was down by 45% from May last year.
Its report said that despite the decline in the number of new jobs, there were positive signs for future growth in the City, with the FTSE 100 reaching new highs in recent weeks.
Jonathan Nicholson, managing director at Astbury Marsden, said: "Normally this kind of upturn in the market would lead to a surge in hiring but banks are under enormous pressure to keep their costs reined in.
"Many senior staff at investment banks are so tied up in dealing with regulatory issues - ranging from the minutiae of compliance work through to capital adequacy - that they have had little time to focus on pursuing new areas of growth.
"While we expect the coming months to be quite patchy, we are also noticing a greater sense of optimism building around the City jobs market."
