The following paragraph is from a book. I am confused about how the author uses ‘the' to represent a group. The author has used ‘the' before these banks in once instance and omitted in two instances. What is the logic here?

Corporations' dependence on bank loans had decreased with time, as they increasingly tapped the debt market. Commercial banks therefore entered the fixed income business and the investment banks' market share in this business slipped. As a result investment banks focused on higher value -added products like structured debt, derivatives and proprietary trading.

Aha! You missed that "the" modifies "market share," not "investment banks'."

In the other cases, "banks" are the subjects of the verbs.
"banks entered"
"banks focused"

In the case in question, "market share" is subject of the verb.
"market share slipped"

I know some will say the subject of the verb is "The investment banks' market share in this business."

I suppose it's argumentative, but I really feel that "The" goes with "share." Without "share" you wouldn't really need "the."
You could say, "Commercial banks entered and investment banks slipped."
Students: Are you brave enough to let our tutors analyse your pronunciation?

Avangi "the" modifies "market share," not "investment banks'."
Pardon my ignorance, but I think 'market share' does not need any article as it is clearly defined by the possessive " investment banks' ".
For example, in 'the company's market share', 'the' applies to 'company' and not to 'market share'.
I admit it's arguable. We know the article may often be omitted, sometimes optionally. In this case, it could certainly be omitted: "When that happened, investment banks' market share slipped."
We're just looking for a difference as to why the author used "the" in the middle case only:
commercial banks entered
the investment banks' market share slipped
investment banks focused

I think the reason is, he wants to say "the [blank blank] market share slipped."
To say that "market share" doesn't need an article because it's already there for "investment banks" begs the question. Where else are you going to put it?Emotion: smile