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Abstract:  This paper reviews the broad structural shifts in banks and other financial institutions in Kenya in the face of globalization. It is found that Kenya has moved into universal banking, reflected by the gradual elimination of ‘specified’ non-bank financial institutions since 1994 and the increased share of net commissions and fees in the banks’ total income, from 10 per cent in 1998 to 21 per cent in 2007. The evidence suggests that the sector experienced reduced concentration and presumably more competition during 1998–2007. Further, it is found that small banks are the least competitive (most concentrated), followed by large banks and then medium-sized banks.