## 4 Results
The integration of digital technology in these economies enhances banking efficiency and operational scalability, reducing cost structures and contributing to sustained profitability. In contrast, Bulgaria and Romania, with lower digital inclusion rates, exhibit greater variability in financial returns, suggesting that technological disparities exacerbate financial sector fragility and limit opportunities for growth. Furthermore, GDP per capita, a significant macroeconomic indicator, aligns closely with ROE trends in many EU countries. Higher-income nations, including Luxembourg and Ireland, demonstrate relatively stable ROE levels across quantiles, reflecting the resilience of their financial institutions. Conversely, lower-income countries such as Bulgaria and Greece show more pronounced fluctuations, indicating that macroeconomic conditions play a fundamental role in shaping banking sector performance. This relationship underscores the importance of economic stability in moderating financial sector volatility and fostering sustainable profitability. Employment in the banking sector and research and development (R&D) expenditure also contribute to financial outcomes. Countries with higher R&D investments, such as Sweden and Finland, exhibit more stable ROE distributions, suggesting that innovation-driven financial services enhance sectoral competitiveness. Meanwhile, banking employment trends reveal structural differences, as some economies, including France and Germany, maintain a high number of employees despite digitalization, potentially affecting efficiency and cost structures. In contrast, Estonia and the Netherlands, with relatively lower employment figures in banking, appear to benefit from higher digitalization levels that optimize financial sector productivity. Overall, the MMQR results illustrate that banking performance in EU countries is highly contingent on digital adoption, macroeconomic stability, and sectoral investments. While digital frontrunners such as Denmark and the Netherlands maintain robust banking performance across quantiles, economies with lower digital penetration face greater chal lenges in achieving consistent profitability. Consequently, policy efforts aimed at enhancing digital integration and fostering innovation are important for reducing financial sector disparities across the EU and ensuring long-term economic resilience. The quantile process estimates depicted in Figure 3 provide a dynamic perspective on the impact of explanatory variables across different quantiles of the return on equity (ROE) distribution in European Union countries. By examining the patterns and variations across quantiles, it becomes evident that the relationships between banking performance, digital inclusion, and economic indicators differ significantly across the spectrum of ROE, reflecting the underlying heterogeneity among EU member states. The variable GDP displays a negative influence on ROE across most quantiles, with a more pronounced effect in the lower quantiles. This suggests that countries with lower profitability levels, such as Greece and Bulgaria, are more sensitive to macroeconomic conditions, highlighting the challenges posed by weaker economic fundamentals. In contrast, higher quantiles, representing countries with more stable financial sectors such as Luxembourg and Ireland, exhibit a less pronounced dependency on GDP, likely due to the resilience and diversification of their financial institutions. E-banking penetration, represented by LOGEBANK, shows a consistently negative impact across quantiles, albeit with varying magnitudes. The stronger effects observed in lower quantiles may indicate that in countries with less profitable financial sectors, such as Romania and Hungary, the transition toward digital banking is associated with restructuring costs or initial inefficiencies.