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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 bankDexia is working on raising cash, its chief executivetold Belgian business newspaper L'Echo in an article publishedon Saturday.

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

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

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

Dexia was not immediately available to comment.

In August, Belgium's central bank governor Luc Coene toldL'Echo that Dexia might have to be recapitalised should marketconditions worsen.

Dexia became the first victim of the euro zone debt crisiswhen it was rescued last year by Belgium, France and Luxembourgas its strategy of borrowing in short-term markets to financelending over the long term came unstuck.

It is in the process of selling off its businesses. OnFriday Dexia said it had completed the sale of its Luxembourgarm to Qatar's Precision Capital and the Luxembourg state, andwould 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)(ReutersMessaging: rm://ben.deighton.thomsonreuters.com@reuters.net))

Keywords: DEXIA RECAPITALISATION/