Rate hikes to help euro zone banks but war a drag - ECB

(Reuters) - Euro zone banks will benefit from a gradual increase in interest rates but market volatility and the impact of Russia's war in Ukraine could prove a drag, European Central Bank supervisor Andrea Enria said on Thursday.

"The current environment, however, is marked by increased volatility and lower equity valuations, as markets anticipate that the profitability and asset quality of banks may be affected by adverse macroeconomic developments," he told a European Parliament committee hearing.

(Reporting by Balazs Koranyi; Editing by Toby Chopra)