This study examines the determinants of financial performance in commercial banks in Kenya, focusing on bank-specific factors and macroeconomic variables. Using panel data from 37 commercial banks over a ten-year period (2001-2010), the authors employed a linear multiple regression model and Generalized Least Square (GLS) to analyze the impact of these factors. The findings indicate that bank-specific factors such as capital adequacy, asset quality, management efficiency, and liquidity significantly affect the financial performance of commercial banks in Kenya. Specifically, higher capital adequacy, better asset quality, and higher management efficiency are positively correlated with better financial performance, while liquidity management has a weaker positive relationship. In contrast, macroeconomic variables like GDP growth and inflation had mixed effects, with inflation showing a significant negative impact on bank performance. The moderating role of ownership identity (domestic vs. foreign) was found to be insignificant, suggesting that it does not significantly influence the relationship between financial performance and its determinants. Overall, the study concludes that the financial performance of commercial banks in Kenya is primarily driven by board and management decisions, while macroeconomic factors have a less significant impact.This study examines the determinants of financial performance in commercial banks in Kenya, focusing on bank-specific factors and macroeconomic variables. Using panel data from 37 commercial banks over a ten-year period (2001-2010), the authors employed a linear multiple regression model and Generalized Least Square (GLS) to analyze the impact of these factors. The findings indicate that bank-specific factors such as capital adequacy, asset quality, management efficiency, and liquidity significantly affect the financial performance of commercial banks in Kenya. Specifically, higher capital adequacy, better asset quality, and higher management efficiency are positively correlated with better financial performance, while liquidity management has a weaker positive relationship. In contrast, macroeconomic variables like GDP growth and inflation had mixed effects, with inflation showing a significant negative impact on bank performance. The moderating role of ownership identity (domestic vs. foreign) was found to be insignificant, suggesting that it does not significantly influence the relationship between financial performance and its determinants. Overall, the study concludes that the financial performance of commercial banks in Kenya is primarily driven by board and management decisions, while macroeconomic factors have a less significant impact.