By Brenna Hughes Neghaiwi and Saeed Azhar

ZURICH (Reuters) - Swiss wealth manager Julius Baer has halted any new business with wealthy Russians, two sources familiar with the bank's operations said, as European lenders try to limit their exposure to Russia's elite amidst tightening sanctions.

Wealth managers in Europe have sought to distance themselves from the economic and political fallout of Russia's invasion of Ukraine, and Julius Baer this week began blocking any new business with Russian clients, the people said.

The European Union last week imposed sanctions blocking Russian citizens and residents from making new deposits above 100,000 euros ($109,160) into European bank accounts. However, Russian residents of an EU member state and dual citizens of a member state were exempted from that ban.

Switzerland on Monday followed the European Union's lead in imposing sanctions against Russia, and on Friday broadened its sanctions to include other financial restrictions already covered by the EU's moves.

That included blocking deposits above 100,000 Swiss francs ($108,885) from Russian citizens or from individuals and legal entities residing in Russia, as well as requiring banks to report on existing deposits from Russian clients above 100,000 francs.

However, already ahead of that move, Swiss wealth managers have sought to limit their exposure to Russian clients after previously finding themselves in the crosshairs of U.S.-imposed sanctions, including against Russia in 2014 and 2018.

"As a global company, we are used to operating in different jurisdictions and are obliged to comply with all applicable regulations. At the same time, we are well used to operating in neutral territory as a Swiss company," Zurich-based Julius Baer said, adding it took appropriate measures as necessary.

Wealth managers say European banks are currently taking an even more cautious approach than dictated by European sanctions by declining any new business with Russian clients, regardless of where they reside or whether sanctions apply to their money.

"If you go out to various custodian banks in Europe, nobody wants to touch a Russian contact," said one London-based wealth manager, who asked not to be named. "They're fine with their existing Russian client base and the assets that they hold. (But) if you go to all the obvious players, they'll immediately say no (to taking on any new Russian clients)."

The uncertainty has caused a number of Russian clients who already bank in Europe to seek out new relationships, the person said.