A rise in eurozone policy rates would have a mixed effect for most of the currency area’s banks, the European Central Bank says.

The ECB’s supervisory arm used the balance sheet data filed by banks at the end of 2016 to conduct a sensitivity analysis of their interest rate risk. The tests show banks in the eurozone would gain higher net interest income if policy rates rose, but their equity would lose value.

The ECB conducted the tests using six hypothetical interest rate shocks, drawing on