JOHANNESBURG - South African lender Absa Group said on Monday its profit for the half year that ended June 30 rose 29.8%, announcing a more than doubling of dividend to 650 cents per share.

Its headline earnings per share, its profit measure, came at 1280.2 cents ($0.7888), from 986.2 cents posted a year ago.

South African lenders have rebounded from COVID-19 lows but are seen treading a fine line between high local unemployment worsened by surging inflation and a higher interest rate regime that is a positive for banks but increases risks of loans going sour.

"We need to navigate that carefully with our customers ... we are able to make sure that they're focused on paying us back," said Absa Group Financial Director Jason Quinn, adding that its collection centres are proactively managing that risk.

Overall the bank sees a net benefit of higher interest rates with every 1% rise in policy rates adding 500 million rand to its income, he said.

Absa reported a 16.6% increase in return on equity, a key measure of bank profitability, and grew revenue by 14% to 46.9 billion rand.

Absa has been trying to improve its performance since splitting from its former British parent Barclays in 2017.

"We've been able to take share for the last few years (in)mortgages and vehicles and deposits," Quinn said, adding that the momentum created by its strategy will ensure future growth.

Its new CEO Arrie Rautenbach, who started in April, announced a raft of changes to its top management in June to refocus its strategy towards being more customer centric.

"I am confident that our strategy is delivering results," Rautenbach told investors earlier in the day.

"We are conscious that the operating environment is uncertain but we are well positioned across the balance sheet to withstand it."

(Reporting by Promit Mukherjee; Editing by Kim Coghill and David Evans)