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UPDATE 1-Dexia working on raising capital, CEO tells paper

* Capital hike could be end 2012, or start 2013

* Bank considering recurring yearly capital raise

* CEO de Boeck declined to comment on size of cash hike

(Adds further details on cash raising, background)

BRUSSELS, Oct 6 (Reuters) - Troubled Franco-Belgian bank Dexia is working on raising cash, its chief executive told Belgian business newspaper L'Echo in an article published on Saturday.

"Every day that passes we get closer to the deadline, because Dexia is continuing to lose money," Karel de Boeck told the paper. "We are therefore working on raising capital."

He said he did not know whether the capital raising would be at the end of this year, or the beginning of next.

De Boeck said the bank was considering either a recurring yearly capital raising, or a one-off operation, but declined to say how much cash it would seek to raise.

Dexia was not immediately available to comment.

In August, Belgium's central bank governor Luc Coene told L'Echo that Dexia might have to be recapitalised should market conditions worsen.

Dexia became the first victim of the euro zone debt crisis when it was rescued last year by Belgium, France and Luxembourg as its strategy of borrowing in short-term markets to finance lending over the long term came unstuck.

It is in the process of selling off its businesses. On Friday Dexia said it had completed the sale of its Luxembourg arm to Qatar's Precision Capital and the Luxembourg state, and would likely suffer a loss of 199 million euros ($258.8 million) as a result.

(Reporting by Ben Deighton; Editing by Catherine Evans)

((ben.deighton@thomsonreuters.com)(+32 2287 6811)(Reuters Messaging: rm://ben.deighton.thomsonreuters.com@reuters.net))

Keywords: DEXIA RECAPITALISATION/