Broker Charles Schwab (US:SCHW) said on Monday that rising interest rates and robust customer inflows drove the company's most profitable quarter ever. 

Third-quarter net income rose 32% to $2.02 billion, or a record of 99 cents a share, from $1.53 billion, or 74 cents a share, a year ago. Shwab reported adjusted earnings per share of $1.10 and $5.50 billion of revenue. Both metrics were records at Schwab. The results beat analyst estimates of $1.05 per share on $4.60 billion of revenue. A year ago, Schwab reported adjusted earnings of 84 cents a share on revenue of $4.6 billion. 

Bettinger said active brokerage accounts rose four percent year over year to about 34 million. 

However, average trading volume was flat and noted weakening investor sentiment for stocks. "Equity markets saw the largest percentage drop for the month of September since 2008, with the S&P 500 extending its year-to-date losses to 25%," Schwab's Co-Chairman and Chief Executive Officer Walt Bettinger said in a prepared statement.

"Bolstered by record third quarter retail inflows, core net new assets equaled $115 billion for the period — a 7% annualized growth rate. Total client assets were $6.6 trillion at quarter-end, down 13% from a year ago, as robust asset gathering was more than offset by the $1.4 trillion impact of lower market valuations on client portfolios over the past 12 months," Bettinger said in a news release. 

Third-quarter net interest revenue jumped 44% to $2.9 billion from a year ago, lifted by recent unprecedented Federal Reserve rate hikes. Net interest margin rose more than a third of a percentage point to 1.97%. 

Net interest revenue rose 44% to $2.9 billion, as rising rates helped our net interest margin to expand sequentially by 35 basis points to 1.97%. "This movement offset the 6% contraction in interest-earning assets driven by clients' cash-sorting behavior and continued market engagement," the company said.