DIGITALIZATION AND BANKING PERFORMANCE IN THE EUROPEAN UNION: AN EMPIRICAL OUTLOOK ON NPL, ROA, ROE AND DESI INDEX

This study examines the relationship between digitalization and banking performance across European Union member states, integrating national digital maturity, measured through the Digital Economy and Society Index (DESI), with key financial indicators such as Return on Assets (ROA), Return on Equity (ROE) and Nonperforming loans to total gross loans (NPL). The research aims to assess whether differences in digital readiness translate into measurable variations in profitability and asset quality, thereby providing insights into how digital progress shapes the resilience and efficiency of EU banking systems. The methodological approach relies on descriptive statistical comparisons and preliminary correlation patterns, with econometric analyses to be developed subsequently. The conceptual framework is grounded in three hypotheses which posit that higher DESI scores are associated with increased profitability, lower credit risk and differentiated effects across low- and high-DESI economies. The findings of the study suggest that digital maturity may represent a structural determinant of banking performance, although its impact is likely to vary according to national digital infrastructure and institutional conditions. Beyond its immediate analytical contribution, this research offers a foundation for future empirical work, including panel regressions, nonlinear specifications and comparative analyses aimed at capturing the complex interactions between digitalization, macroeconomic factors and banking sector performance. The results therefore highlight the relevance of digital readiness in shaping the future trajectory of European banking.