E-banking constitutes the use of ATMs, mobile and internet banking, automated teller machines, television based banking and automated personal computer banking. Despite the significance of e-banking in clarifying financial execution, the effect of e-banking on banks performance is as yet misconstrued. The study therefore, did seek to analyze the effect of e-banking on financial performance of commercial banks in Kenya. Three theories namely; technology acceptance model, financial inclusion theory and innovation diffusion theory provided the theoretical foundation for this study. This study did embrace a documentary review research design. The unit of study were the registered and licensed commercial banks operating in Kenya. According to Central Bank of Kenya there are 42 commercial banks licensed to operate in Kenya as per the year 2021 where the researcher conducted a census of all the 42 commercials banks. Secondary data was collected from the commercial bank reports for the year 2017-2020 and was analyzed using descriptive and inferential statistics. Reports from of 40 commercial banks were obtained since the remaining two were suspended by the concerned ministry. The study established that every bank had at least one form of electronic banking service. Inferential statistics showed that a positive correlation exists between value of mobile banking, value of ATM transactions and average net income. While there is an average correlation between internet, banking cards banking and average net income. The multiple regression model showed that the adjusted R-square=0.955 which shows that the value of predictors (mobile banking, internet banking, Banking Cards, ATM) contributes to 95.5% of the financial performance (Average net income). The study concludes that electronic banking have an effect on financial performance among commercial banks in Kenya. The study recommeds to the banking industry managerial units to formulate policies of innovation and practices that would enhance electronic banking usage in propelling their performance in their respective institutions.

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